Rolls-Royce has rounded off an upbeat round of financial results from the world's main aero-engine suppliers with a steady performance from its aerospace division, and the promise of further growth this year.
Sales from the R-R aerospace division climbed by nearly one-quarter in 1996 to come close to ú3 billion ($4.9 billion). The growth includes a full year from the Allison acquisition, but, even excluding this, the underlying business was up by around 16%.
Commercial sales grew by 13%, helped by rising deliveries of the Trent and increased spares orders, but hampered by 50 fewer Tay shipments following the bankruptcy of Fokker - a trend which R-R expects to continue this year.
Military sales also picked up, because of resumed deliveries of Panavia Tornados to Saudi Arabia and a growth in spares. The business, including Allison, now accounts for one-third of the R-R aerospace business.
Operating profits for the division also grew by ú50 million, to reach ú185 million, although the R-R group overall reports a ú44 million net loss after taking a heavy provision to tidy up steam-power-generation businesses, which it plans to sell.
The R-R results follow another strong performance from the General Electric aircraft-engines business, which again managed to keep operating margins above 19%. The main focus of growth remains on its engine-services unit, which grew by more than 40%in 1996. It already makes up more than one-third of the division's sales and around three-quarters of its profits. The target is to reach sales of $4 billion by the end of the decade, accounting for half the division's business.
Increased spares business also helped Pratt&Whitney continue its profits improvement. Sales were largely unchanged, partly because of a change in accounting for the company's share in collaborative ventures, part of a general tightening of financial controls.
BMW Rolls-Royce says that it does not expect to see profits until early in the next decade, because of heavy product investment. Chairman Bernd Pischetsrieder adds that a selection of the BR715 to power the proposed AE-100 regional jet would require another hefty outlay and delay profits.
With an anticipated market for 1,000 of the regional jets, the programme is potentially valuable, but will require work on modifications. These include adapting the engine to underwing pylons, rather than the rear-fuselage mountings required for the McDonnell Douglas MD-95 on which the BR710 is due to be launched.
BMW R-R has invested around DM1 billion ($600 million) in developing the BR700 family, and a further DM400 million in its Dahlewitz plant. The company says that it had not originally planned to develop the BR710 and BR715 in parallel, nor to win places on three new aircraft programmes in only two years.
Source: Flight International
