For the six months ended on 30 June Rolls Royce said sales were 3% lower to reach £6.3bn but profits before tax dropped 32% to £439m, both on an underlying basis.
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Earlier this month, Rolls-Royce issued its third profit warning in a year, citing weak demand for its aircraft engines.
“The company provided some upbeat forecasts for sales, profits and dividends in 2015 at the time of its final results in May so the market will be keen to hear if that guidance remains in place”.
East said: “In the near term, we are managing a significant transition from mature engines to newer, more fuel efficient ones, such as the Trent XWB, Trent 7000 and Trent 1000”.
Analysts at Liberum said that while the half year results did not present any surprises, the focus would be on East’s preliminary recovery plans, which are already underway in the group’s marine and aerospace divisions. Mike Mosley, chief operating officer at Rolls-Royce, said this requires a flexible workforce with a high degree of specialist knowledge.
East, the former boss of software group ARM Holdings who joined the company on 2 July, has been billed as the saviour of Rolls-Royce. Underlying earnings per share were 18.27 pence, compared to 25.69 pence previous year. As well as the pressure in civil aerospace, Rolls has suffered from falling demand for business jet engines, the impact of Russian sanctions, and a hit to its marine business from the decline in the price of oil.
It will sell Trent 700 engines for 20 Airbus A330 regional aircraft operated by SAUDIA, Saudi Arabia’s national airline. This first quarter update will also give the company a chance to comment on the recent update from Ofcom regarding BT’s Openreach infrastructure division which is part of its review of the digital communications sector in the UK.
East said: “The continued growth in our order book demonstrates the long-term demand for our innovative products and services and underpins my confidence in the fundamental strength of our business”.
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Rolls separately announced today the appointment of Alan Davies as a Non-Executive Director with effect from November 1.
