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Rolls-Royce reports £852m operating loss on Trent 1000
[LONDON] Aerospace engineering firm Rolls-Royce reported a 2019 operating loss of £852 million (S$1.53 billion), after the cost of tackling durability problems with its Trent 1000 engine eclipsed record engine deliveries and a good after-market performance.
Underlying core operating profit rose 25 per cent to £810 million, while core free cash flow came in at £911 million, led by higher profit and reflecting £173 million worth of Trent 1000 insurance receipts, the British company said.
It said the novel coronavirus was likely to hit air traffic growth in the near term, but long-term growth trends remained intact.
It said it expected core operating profit to grow by about 15 per cent this year, with at least £1 billion of free cash flow, in guidance which excludes any material impact from the outbreak.
The company has been working to resolve durability issues with its Trent 1000 engine, which powers Boeing's 787 Dreamliner, with the blades in the TEN variant proving particularly problematic.
Airline customers have had to ground the aircraft for Rolls-Royce to carry out repairs.
It said in November it would take a £1.4 billion exceptional charge connected with the issue.
Chief executive Warren East said the company had made further progress on Trent 1000, with cash costs in line with guidance.
He said Rolls-Royce remained on target to reduce the number of aircraft on the ground to single digits by the end of the second quarter.