Adverse engine mix tames Rolls-Royce first half

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Higher deliveries of Rolls-Royce Trent 1000s for launch customers and lower figures for large corporate jet engines have held back the powerplant manufacturer’s half-year civil aerospace profits.

Rolls-Royce says this “adverse mix” contributed to the 10% fall in underlying profit over the first six months of 2014, and that this was exacerbated by higher charges for research and development.

But it forecasts underlying revenue growth of 2-5% for the full year in its civil aerospace division and an underlying profit of 8-12%.

The division delivered 342 engines over the half-year. Trent deliveries were up by 16% while those for large corporate jets were down by 10%.

Underlying original equipment revenues increased, as a result, by 4% but a one-third fall in service revenues for RB211 engines kept the overall revenue figure flat at £3.2 billion ($5.4 billion).

Improved on-wing time of the Trent 700 engine has also led to a deferral of sales of life-limited parts for the powerplant.

Rolls-Royce’s order book was down by 2% to £58.8 billion, partly as a result of the Emirates Airbus A350 cancellation. The cancellation of Skymark Airlines’ six Rolls-Royce-powered A380s, which represent another 0.5% of the order book, fell outside of the half-year period.

Over the six months the manufacturer secured a net order intake of £2.6 billion, compared with £10.3 billion last year.

Rolls-Royce has positioned itself as the exclusive supplier of engines to the newly-launched Airbus A330neo programme, which is set to succeed the poorly-selling A350-800 for which the manufacturer offers the Trent XWB powerplant.