Rolls-Royce swung to a surprise profit after its defence business boomed and a huge cost-cutting programme took effect
Rolls-Royce swung to a surprise profit after its defence business boomed and a huge cost-cutting programme took effect.
The engineering giant made £114 million in the first six months of the year – up from losses of £5.2 billion in the first six months of 2020.
The FTSE100 group has been hammered by the slump in international air travel since the pandemic started, as it earned around half of its income before Covid from servicing the engines on long-haul planes.
To combat this, Rolls kicked off a wide-ranging overhaul that included cutting 9,000 jobs from its 52,000-strong workforce and raising £5 billion. It said yesterday it has completed the majority of the restructuring.
The company has laid off 8,000 people so far and is expecting to save £ 1 billion this year compared with 2019. Rolls also said it had been able to deliver defence parts more quickly than it expected – boosting its first-half performance.
But the engine giant said the ‘uncertain pace of recovery in international travel’ means it will miss a key financial target next year, when it was expecting to generate £750 million in free cash flow. Shares in the group rose 5.9 per cent, or 6.14p, to 110.68p.
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