Profits at Britain’s Rolls-Royce more than doubled in 2023

By Thomson Reuters Feb 22, 2024 | 1:10 AM

By Sarah Young

LONDON (Reuters) -Britain’s Rolls-Royce said annual profit more than doubled last year, beating consensus, and it forecast a further jump in 2024 as aircrafts powered by its engines fly more, defence orders flow and data centre demand rises.

Rolls, which powers ships and submarines and makes power generation systems as well as engines for big commercial aircraft, has delivered strong growth under Tufan Erginbilgic, the former BP executive who took the helm a year ago.

“We are unlocking our full potential as a high-performing, competitive, resilient, and growing Rolls-Royce,” he said in a statement on Thursday.

The profit improvement was partly driven by cost savings put in place by Erginbilgic and his pricing strategy which is aimed at making Britain’s biggest engineering name a higher margin business.

Last year’s group underlying operating profit came in at 1.6 billion pounds ($2 billion), well ahead of an analyst forecast of 1.4 billion pounds and its own guidance of 1.2-1.4 billion pounds, and compared to the 652 million pounds it made in 2022.

For this year, Rolls forecast underlying operating profit would rise by at least 6%, predicting a range of between 1.7 billion pounds and 2 billion pounds, compared to the current consensus forecast of 1.7 billion pounds.

Over the course of 2023, shares in Rolls-Royce rocketed over 200%, making it the top performer in Britain’s bluechip index, helped by a profit upgrade in July and an announcement in November that it could quadruple profit by 2027.

($1 = 0.7901 pounds)

(Reporting by Sarah Young; Editing by Kate Holton)