Summary
- Rolls-Royce reported a £1.1 billion operating profit in H1 2024, up £0.5 billion despite supply chain challenges.
- The A350 engine leads in sales, with Trent XWB-97 engines securing 108 new orders in H1.
- Rolls-Royce raises 2024 financial guidance after strong H1 results, now aiming for £2.1-2.3 billion operating profit.
The UK aviation giant Rolls-Royce has announced its financial results for the first six months of 2024. The aircraft engine maker reported a £1.1 billion ($1.4 billion) operating profit in H1 2024, with the profit rising by £0.5 billion ($640 million) despite a “challenging supply chain environment.”
The positive financial results were attributed to the company’s transformation program and strategic initiatives, with commercial optimization and cost efficiency actions, which have helped to mitigate the impact of inflation. In a statement, Tufan Erginbilgic, CEO of Rolls-Royce , said:
“We are expanding the earnings and cash potential of the business in a challenging supply chain environment, which we are proactively managing. We are on track to deliver our mid-term targets.”
The A350 engine leads in sales
According to the report, Rolls-Royce’s civil aerospace division saw the largest improvement in H1 2024, delivering an operating margin of 18%. This was driven by higher aftermarket profits from large engine long-term service agreements (LTSA) and time-and-materials contracts, stronger performance in business aviation for both original equipment and aftermarket services.
According to the statement,
“We continue to drive for improved commercial terms and lower costs across our widebody and business aviation contracts. This resulted in total contractual margin improvements of £431 million.”
In civil aerospace, the Trent XWB-97 engines secured 108 new orders and became the best selling engine in the first half of the year. It is worth noting that the Trent XWB-97 engines power Airbus A350-1000 widebodies. The XWB-97 is a 97,000lb thrust Trent and is the more powerful sister engine of the XWB-84, which powers the A350-900 aircraft.
Related
Airbus A350 Enhancements: Upgraded Rolls-Royce Trent XWB-84s To Enter Service Next Year
The new engines will help reduce 1% of CO2 emissions.
In a recent £1 billion investment program to improve the company’s engines, Rolls-Royce said that it will upgrade its trent XWB engines with a new disc alloy and better aerodynamics. The newly upgraded engines have already been tested on the A350. According to the company, the aircraft underwent some of the most extensive endurance testing, including 2,800 hot cycles.
Future financial outlook
Rolls-Royce has raised its 2024 financial guidance in response to a strong first half of the year. The UK company now anticipates reaching an operating profit between £2.1 billion ($2.6 billion) and £2.3 billion ($2.9 billion) this year, up from the previously anticipated range of £1.7 billion ($2.1 billion) to £2 billion ($2.5 billion).
Photo: Fasttailwind | Shutterstock
The company’s updated free cash flow guidance for 2024 now includes a £150-200 million ($192-256 million) impact due to ongoing supply chain issues and limited parts availability.
“We anticipate a continued impact to free cash flow for a further 18-24 months as supply chain challenges persist. We are actively managing these challenges and seek to mitigate the costs.”
Related
5 Things You Might Not Know About The Airbus A350
The A350 is not only favored by airlines but also cherished by passengers.