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Rolls-Royce sees 2018 results at upper end of guidance

[LONDON] British engine maker Rolls-Royce said that its 2018 results would come in at the upper half of its guidance range, after its civil aerospace and power systems businesses performed better than expected in the first half.

Rolls said in February that its free cashflow would come in at about £450 million (S$804.2 million), give or take £100 million. On Thursday it said this figure was now expected to come in at the upper half of guidance.

The upgrade to guidance comes despite pressure on the company to fix problems with its Trent 1000 engine which powers the Boeing 787. A parts durability issue has grounded planes resulting in Rolls facing extra costs.

The company raised its estimates of how much fixing the problem and compensating airlines would cost next year. It had said that costs would fall next year, but its new estimate put the hit at £450 million, the same level as this year.

Rolls also said in its half-year report on Thursday that it would now be recognising an exceptional charge of £554 million in respect of the Trent 1000 issues for the period to 2022.

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