According to a new trading update from Rolls-Royce, the company has confidence for the future and is maintaining full-year guidance, despite supply chain pressures and rising energy prices.
Having completed a £2bn programme of disposals with the sale of ITP Aero for €1.6bn and immediately repaid their £2bn UK Export Finance backed loan due in 2025, the company says it can weather the economic storms through more agile operations and a sustainably lower cost base.
The company point to record order intake in Power Systems, large engine flying hours at 65% of 2019 levels in the four months to the end of October and up 36% year to date, and two 5-year contracts renewed in Defence securing $1.8bn of continued aftermarket services.
In his last trading update before stepping down, Chief Executive Warren East says: “The continued recovery in large engine flying hours, record order intake in Power Systems and a resilience in the Defence business give us confidence in the future. Our more agile operations and sustainably lower cost base position us well for the uncertain pace of the recovery from the pandemic, market volatility and changes in economic conditions. We continue to focus on operational execution and delivering on our commitments and we have maintained our Group financial guidance for 2022. Our expertise and strong positions in established markets and investment in New Markets place us well to pursue decarbonisation, net zero and evolutionary technologies that can create substantial long-term economic and social value. Disciplined capital allocation will continue to be pivotal in our New Markets ventures as we invest in the technologies of the future. The completion of our disposal programme with the sale of ITP Aero has enabled us to repay £2bn of debt. This marks a milestone recovery in the strength of our balance sheet, and a clear step on our path back to investment grade in the medium term.”
