rollsroyce ramps up cost savings in ‘mixed’ markets
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice
Emiratesvoice, emirates voice
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice

Rolls-Royce ramps up cost savings in ‘mixed’ markets

Emiratesvoice, emirates voice

Emiratesvoice, emirates voice Rolls-Royce ramps up cost savings in ‘mixed’ markets

Rolls-Royce
London - Arab Today

Rolls-Royce, the British jet engine maker battling to recover from a string of profit warnings, said costs savings would be at the top end of its target range this year as it responds to tough conditions in some markets.
The company, which makes engines for fighter jets, commercial aircraft, ships and nuclear submarines, is one year into a turnaround program aimed at cutting costs after a slowdown in several of its biggest markets.
But some analysts say it has a mountain to climb, having made just 15 percent of a consensus full-year profit forecast of 686 million pounds ($854 million) in the first half of the year.
“We have made steady progress in 2016 to date, delivering a ramp up in large engine production and implementing the first stage of our transformation program,” CEO Warren East said in an update to investors.
“Overall, we remain comfortable that our expectations for profit and free cash flow remain achievable.”
The company said it now expected cost savings this year to be at the top end of a 150-200 million pound forecast range.
East has cut 20 percent of group management and accelerated the manufacturing process. For example, the firm is assembling a Trent 100 engine 27 percent quicker than a year ago, he said.

While it is trading in line with expectations for 2016, Rolls-Royce said the wider market outlook was mixed.
Demand for its engines for extra wide-body civil aircraft was strong, but there was further weakening in business aviation and no sign of recovery in offshore oil and gas markets for its marine business, where the order book remained “very weak.”
Finance chief David Smith told investors civil orders were lower this year, but deferrals and cancelations were modest.
For 2017, Rolls said near-term prospects remained mixed, while the long-term order book remained at near record levels.
East said his team was starting to look beyond fixing the nuts and bolts toward longer-term strategy, where there were new technology opportunities, for example in electric engines.
“During 2017 there might be some output from starting to look more seriously at some of the strategic stuff, but I still expect a broad portfolio of different market applications,” he told reporters.

NEW STANDARD
Rolls-Royce also highlighted the affect of a change in its accounting procedures to the IFRS-15 standard.
“It doesn’t affect the profitability of any contract, it is simply pushing back the timing of when we recognize that profit,” Smith said. “The new accounting standards do not affect our cash position in any way.”
Under the rules, due to be brought in 2018, Rolls-Royce, which makes most of its money from maintenance rather than at the point of sale, will have to wait until it provides servicing before it can book more revenue and profit from long-term deals.
It said its 2015 civil aviation operating profit would have been 900 million pounds lower under the new rules.
Rolls-Royce has not given a specific profit forecast for this year, other than saying it would take a 650 million pound hit due to weaker demand and a variety of other factors.
Smith, however, said cash flow from its civil aircraft business — its biggest — was improving.
“By implication we expect to see stronger cash flow for 2017, so something around or above break even next year for free cash flow is absolutely what we targeting,” he said.
The company is forecasting a cash outflow of up to 300 million pounds this year.

Source: Arab News

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

rollsroyce ramps up cost savings in ‘mixed’ markets rollsroyce ramps up cost savings in ‘mixed’ markets

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

rollsroyce ramps up cost savings in ‘mixed’ markets rollsroyce ramps up cost savings in ‘mixed’ markets

 



GMT 05:14 2024 Wednesday ,07 February

Sophisticated Classic Dining Room Design Ideas

GMT 16:17 2018 Thursday ,30 August

Five Saudi women pilots granted GACA licences

GMT 05:06 2024 Tuesday ,06 February

New hunt for flight MH370 gets under way

GMT 13:00 2017 Wednesday ,23 August

Civilians among 30 dead in Yemen air raids

GMT 15:12 2011 Friday ,29 July

Pakistan observes air crash anniversary

GMT 04:23 2012 Friday ,30 March

Abdul Halim Hafez past revealed

GMT 08:44 2015 Wednesday ,25 February

Lubna emphasises generosity of UAE

GMT 11:15 2017 Monday ,10 July

Moroccan TV host is happy for her program

GMT 09:55 2017 Saturday ,15 July

China's late Nobel laureate Liu Xiaobo cremated

GMT 14:43 2011 Sunday ,03 July

Zeina denies wearing head veil

GMT 05:12 2017 Friday ,21 July

6.7-magnitude quake kills two in Greece

GMT 16:03 2011 Saturday ,18 June

Fifi Abdo alive
 
 Emirates Voice Facebook,emirates voice facebook  Emirates Voice Twitter,emirates voice twitter Emirates Voice Rss,emirates voice rss  Emirates Voice Youtube,emirates voice youtube  Emirates Voice Youtube,emirates voice youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

emiratesvoieen emiratesvoiceen emiratesvoiceen emiratesvoiceen
emiratesvoice emiratesvoice emiratesvoice
emiratesvoice
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
emiratesvoice, Emiratesvoice, Emiratesvoice