Fuel-efficient engines lift Rolls-Royce profits
The company posted a 7 percent rise in profits for the first six months
By CFOWorld staff | CFO UK | Published 12:00, 26 July 12
Rolls-Royce reported a better-than-expected rise in half-yearly profit thanks to increased production and new fuel-efficient planes, the company said on Thursday.
The company posted a 7 percent rise in profits for the first six months thanks to demand from Airbus and Boeing who in turn are responding to increased demand from airlines for new fuel-efficient planes.
The world's second-largest maker of aircraft engines behind US group General Electric reported underlying pre-tax profit of £637 million for the six months to the end of June on revenues 5 percent higher at £5.8 billion.
Europe's Airbus and US rival Boeing are ramping up output and are targeting more than 1,100 deliveries this year.
The company raised the interim dividend by 10 percent to 7.6 pence per share and said it expected to deliver further growth in 2012 in spite of global economic uncertainty.
"For the full year, we continue to expect good growth in underlying profit with cash flow around breakeven," chief executive John Rishton told reporters.
"The volatility of the economic environment - whether it's in Europe, a slowdown in China or the US - does have an impact and none of us are immune to this. But the diverse range of products we produce and the geographic spread we have helps protect us."
The group sells aero, defence, marine and energy products to businesses and governments in more than 100 countries.
Shares in Rolls-Royce, which have risen 14 percent in 2012, were 4.8 percent up at 869.50 pence by 0824 GMT, valuing the company at around £16 billion.
Rolls, which has more than 5,000 engines worth some £50 billion on order, said revenues at its main civil aerospace unit rose 17 percent in the last six months. Around 60 percent of the unit's revenues come from aftermarket services.
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