Rolls-Royce Full-Year Pretax Profit Falls; Dividend Cut 39%

By Robert Wall

LONDON--Rolls-Royce Holdings PLC on Friday slashed its proposed full-year dividend 39%, the first cut in more than 20 years, as it reported a decline in 2015 full-year profit.

Rolls-Royce's closely watched underlying profit before tax--which excludes changes in the value of currency hedges--fell to GBP1.4 billion ($2 billion) last year, following an 8% retreat in 2014. Underlying sales declined 1% to GBP13.4 billion.

Net profit, including the revaluation of currency hedges, rose to GBP83 million, after a big currency hit in the prior year.

Rolls-Royce said it proposed a full-year dividend of 14.1 pence, down from to 23.1 pence a year earlier. The final payment to shareholders was cut 50% to 7.1 pence from 14.1 pence. It is only the second dividend cut for the company since it was privatized in 1987.

The company left its guidance unchanged after warning in November that profit this year would face a GBP650 million headwind.

Rolls-Royce long ago split from the luxury car maker of the same name, and makes the majority of its profit selling aircraft engines for large, commercial jets, like Boeing Co.'s 787 Dreamliner and Airbus Group SE's A380.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

February 12, 2016 02:31 ET (07:31 GMT)

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