6th Jul 2015 06:13
LONDON (Alliance News) - Rolls-Royce Holdings PLC on Monday said it has slashed its guidance for 2016 due to problems afflicting its Civil Aerospace and Marine divisions.
The FTSE 100-listed aerospace and engineering group said its guidance for its Civil Aerospace business in 2015 remains unchanged, with challenges facing its Trent 700 engine programme, business jet and regional aftermarket divisions offset by better-than-expected benefits from contract provision releases and widebody aftermarket growth.
But for 2016, the company said it is set to take a hit of around GBP300 million in the Civil Aerospace business, due to the Trent 700 programme, business jet and regional aftermarket weakness, which is set to continue into the new year.
In addition, the group expects to take a GBP85 million hit in both its 2015 and 2016 financial year from its Marine business due to continuing weakness in offshore markets.
"I have joined Rolls-Royce because I recognise the fundamental strength of the business and the scale of the opportunities available to it. This is a company with exceptional technology and outstanding long-term prospects," said Warren East, Rolls-Royce's chief executive.
"However, I am clearly disappointed by today's announcement and the impact this will have on our investors and employees. Notwithstanding the market developments, it is our responsibility to build a business that is sustainable and resilient no matter what is thrown at us and this will be my fundamental priority for the next few years," East added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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