Rolls-Royce has reported a rise in half-yearly sales and profits, adding that it is making ‘good progress’ resolving long-running issues with one of its key engines.
The engineering giant, which has its Civil Aerospace and Defence businesses in Derby, this morning revealed that in the six months to the end of June, underlying sales grew by seven per cent to £7.353 billion.
Underlying operating profit at the firm also increased to £203 million - a rise of £48 million.
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Rolls-Royce is made up of a number of businesses: Civil Aerospace, Defence and Power Systems.
The Civil Aerospace division, which is based in Sinfin, Derby, designs, develops and manufactures jet engines for passenger aircraft and is the largest company within Rolls-Royce.
Its Defence site in the city, manufactures nuclear power plants for Royal Navy submarines.
In the first six months of the year, Rolls-Royce said it had seen “significant improvement” in its Civil Aerospace business.
It said that in that time, the company delivered 257 large engines and had seen a ramp up in the production of a brand new one - the Trent 7000.
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Chief executive Warren East said: “We delivered further progress across the group in the first half in line with our full year expectations.
“We expect a significant improvement in cash in the second half as we unwind inventory built up to support customer deliveries and benefit from improved trading in both Power Systems and Civil Aerospace.
“In Civil Aerospace we delivered on key drivers of future cash flow. Defence grew both revenue and profit and enjoyed substantial order intake. In Power Systems, we also saw good revenue growth and order intake and entered the second half underpinned by a healthy backlog.”
However, Rolls-Royce has been troubled by issues with one of its aero engines - the Trent 1000.
It follows instances of parts wearing out quicker than expected on the engine, which powers the Boeing 787 Dreamliner.
Airlines have been forced to ground some of their jets - and Rolls-Royce has so far taken a big financial hit as a result.
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But the firm has since come up with a fix, which it is fitting to all engines in service.
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Mr East said: “We have made good progress on resolving the Trent 1000 compressor issue, though regretfully, customer disruption remains.”
The firm has hit a number of landmarks since the start of the year.
Recently it enjoyed a positive Paris Air Show, where it announced a number of new engine deals and updates on its long-term ambitions to develop electric-powered aircraft.
At the show it announced ‘significant’ deals to supply Trent 7000 engines to Virgin Atlantic and Cebu Pacific.
The firm also revealed it had agreed a deal to buy the electric and hybrid-electric aerospace propulsion activities of Siemens.
Siemens’ eAircraft business, which is based in Germany and Hungary, employs around 180 specialist electrical designers and engineers who have been developing a range of all-electric and hybrid electric propulsion solutions for the aerospace industry. Rolls-Royce hopes to conclude the deal by the end of the year.
Mr East said: “We have taken significant strides in accelerating our electrification ambitions through the announced acquisition of Siemens’ eAircraft business in our drive to create cleaner, more sustainable and scalable power for the future.”
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As for the rest of the year, Mr East told investors that he was optimistic about the company’s prospects.
He said: “Our outlook remains positive, underpinned by continued progress on our key free cash flow drivers towards our ambition to exceed £1 of free cash flow per share in the mid-term, together with the steadily improving health of the Trent 1000 fleet.
“After a decade of significant investment, we remain committed to delivering improved returns while continuing to invest in the innovation needed to realise our long-term aspiration to be the world’s leading industrial technology company.”