Global aircraft engine manufacturer, Rolls-Royce (RR) has published its 2023 half-year (H1) report, which showed improved financial results with an emphasis on civil aviation.
The report showed the company’s operating margin for civil aerospace increased to 12.4% from 3.4% on the previous half-year period, highlighting significant development in the civil side of the industry.
The company reported an underlying operating profit of £673m a significant hike on the 2022 H1 results of £125m.
Rolls Royce stated that its free cash flow of £365m further reflected a continued end-market growth and demonstrated the company’s focus on commercial optimisation and cost efficiencies.
Tufan Erginbilgic, RR CEO, emphasised the current direction of travel is based on “transformation.”
Erginbilgic said: “Our multi-year transformation programme has started well with progress already evident in our strong initial results and increased full-year guidance for 2023. There is much more to do to deliver better performance and to transform Rolls-Royce into a high-performing, competitive, resilient, and growing business.
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“Despite a challenging external environment, notably supply chain constraints, we are starting to see the early impact of our transformation in all our businesses. Better profit and cash generation reflect greater productivity, efficiency, and improved commercial outcomes.”
The substantial results prompted the business to raise its full-year projection, which was revised on 26 July. Rolls-Royce raised the underlying profit to £1.2bn-£1.4bn, reflecting the firm’s expectations for the remainder of the financial year.
According to the company, the increase was and will be driven by strong revenue growth as well as early transformation advantages, particularly commercial optimisation and cost reductions throughout the Group.
The UK-based manufacturer increased its large engine flight hours by 36% from the previous half year to 6.2 million, (83% of 2019 levels), as the aviation sector benefitted from China’s travel restrictions being lifted.
Rolls-Royce reported total engine flying hours were 7.7 million in the period compared to 2022 H1 results of 6.1 million.