Rolls-Royce Results to Reflect Currency Swings
June 28 2016 - 2:42AM
Dow Jones News
By Robert Wall
LONDON-- Rolls-Royce Holdings PLC said currency movements will
provide less of a boost to its performance this year than
previously forecast though the British engine maker is yet to take
into account the slump in the British currency after the U.K.'s
decision to leave the European Union.
Rolls-Royce said on Tuesday that currency swings should increase
revenue by around GBP400 million ($532 million) and underlying
pretax profit by around GBP40 million, before taking into account
the extra benefit of the steep fall in the value of sterling since
last Friday.
In May, the London-based company predicted currency-related
revenue and profit gains of GBP450 million and GBP50 million
respectively.
The referendum's outcome "will have no immediate impact on our
day-to-day business," the company said.
Rolls-Royce, a supplier of aircraft engines for Boeing Co. and
Airbus Group SE planes, had wanted the U.K. to remain in the
EU.
"The medium and long term effect will depend upon the
relationships that are established between the U.K., the EU and the
rest of the world over the coming years," the company said.
The British pound stabilized in early Asia trading on Tuesday,
bringing a reprieve for the battered currency after recent sharp
declines in the wake of the U.K.'s Brexit vote.
Rolls-Royce, which no longer is affiliated with the luxury car
maker of the same name, said business in the first few months of
the 2016 was in-line with plans, while first-half results would be
"close to break-even." The company in May said profit for the
full-year would be generated principally in the second half.
Rolls-Royce Chief Executive Warren East, who has been in the job
almost a year, has been trying to revamp the company to boost
competitiveness, shedding jobs and trying to accelerate cost
savings after a succession of profit warnings.
"We are well on track to delivering our expected cost savings in
2016 and 2017," Rolls-Royce said the trading update. The company is
slated to report half-year results July 28.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
June 28, 2016 03:27 ET (07:27 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Boeing (NYSE:BA)
Historical Stock Chart
From Apr 2024 to May 2024
Boeing (NYSE:BA)
Historical Stock Chart
From May 2023 to May 2024