Rolls-Royce has reported an operating loss of £852 million due to the ongoing impact of issues with one of its key aero engines.
This morning, the company, which has its Civil Aerospace and Defence divisions in Derby, released its full-year results for 2019, in which it said that problems with the Trent 1000 engine had cost the firm almost £1.4 billion over the year.
However, the operating loss for 2019 was not as high as the previous year, when the figure stood at almost £1.2 billion.
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The “in-service” issues with the Trent 1000, which powers Boeing’s Dreamliner, first emerged in 2017.
The problems related to parts wearing out quicker than expected on the engines.
Since then, the engineering giant, which is the city’s largest private sector employer with around 14,000 staff, has been working on a fix which is now being rolled out to customers, which the firm says is “progressing well”.
Rolls-Royce said that design work was also progressing on improved high pressure turbine blades for the more powerful variant of the Trent 1000, the Trent 1000 TEN.
Rolls-Royce has described this as “the last major issue to resolve” and that certification of this component was expected in the first half of 2021.
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The Trent 1000 problems aside, Rolls-Royce said that the underlying performance of the company was good, with the firm confident about 2020.
In 2019, the company achieved underlying revenues of £15.45 billion, a rise of seven per cent on last year, while underlying profits grew by 25% to £808 million.
Rolls-Royce said that the firm enjoyed a particularly strong second half of the year, driven predominantly by the performance of its civil aerospace business, which is based in Sinfin.
During 2019, civil aerospace delivered a record 510 widebody jet engines to it customers, surpassing the 469 engines it made in 2018.
Meanwhile, its Defence business, which has a site in Raynesway that make reactor cores for Royal Navy submarines, secured record orders of £5.3 billion.
Chief executive Warren East said: “After a challenging first half, we had a good end to 2019, delivering 25% growth in full-year underlying operating profit and an encouraging level of free cash flow.
“Our restructuring efforts gained momentum, with run-rate cost savings of £269 million.
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“Civil Aerospace improved its underlying profit significantly, with record engine deliveries.
“We made further progress on the Trent 1000; cash costs are in line with guidance.
“We remain on target to reduce aircraft on ground to single digits by the end of the second quarter of 2020.”
Over the past 12 months, the company has been making progress in developing new more environmentally-friendly aero engines, including electric and hybrid-powered technology.
The firm has recently started making parts for a brand new engine called the UltraFan, which Rolls-Royce claims will offer a 25% fuel reduction compared to the first generation of Trent engine, and deliver the same percentage reduction in emissions.
Later this year, a new £90 million engine test bed at Derby is expected to be commissioned, which will be used to test the UltraFan, along with other engines.
The company has also invested heavily in exploring electric-powered aero engines.
In October, it completed a deal to take over the electric and hybrid-electric aerospace propulsion activities of Siemens.
The purchase of Siemens’ eAircraft business, which is based in Germany and Hungary, was part of Rolls-Royce’s plan to move forward its E-Fan X demonstrator project.
The E-Fan X aims to demonstrate hybrid electric propulsion at the scale required to power regional aircraft.
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Rolls-Royce has already made progress towards the electrification of flight, with successful ground tests of a hybrid propulsion system that can be used across a range of smaller transport platforms including EVTOLs (hybrid electric vertical take-off and landing vehicles), general aviation aircraft, and hybrid helicopters.
These tests are paving the way for experimental test flights in 2021.
Last summer, Rolls-Royce launched a joint research programme on zero-emissions aviation with Wideroe, the largest regional airline in Scandinavia.
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The programme is part of the airline’s ambition to replace and electrify its legacy regional fleet by 2030.
Mr East said: “We continued to invest significantly in research and development and took important steps towards becoming a leader in low carbon technologies.
“We grew our electrical capabilities with the acquisitions of Siemens’ eAircraft business and a majority stake in Qinous, as well as developing new in-house hybrid-electric solutions.”