Rolls-Royce Swings to GBP4.03 Billion Net Loss
February 14 2017 - 3:05AM
Dow Jones News
By Robert Wall
LONDON--Rolls-Royce Holdings PLC (RR.LN) on Tuesday said it
swung to a full-year GBP4.03 billion ($5.05 billion) net loss and
suffered a sharp decline in operating profit stung by a settlement
over corruption charges, the fall in the British pound and setbacks
on high-profile aircraft engine programs.
Rolls-Royce, best known for making aircraft engines for Boeing
Co. and Airbus SE long-range planes, reported a GBP83 million
profit the year prior. The loss in the latest year reflected a
large, non-cash accounting hit from the revaluation of U.S.
currency hedges after the British pound slumped in the wake of the
Brexit vote. It included a GBP671 million a one-time charge for
bribery settlements with U.S., British and Brazilian
authorities.
The company's more closely watched underlying pretax profit,
that strips out one-time items and currency fluctuations, fell for
a third year to GBP813 million from GBP1.43 billion in the year
earlier, ahead of expectations. Underlying sales fell 2% to GBP13.4
billion.
Earnings this year will only be modestly better, Rolls-Royce
said. Underlying free cash flow, which was GBP100 million last
year, should be similarly weak in 2017, the company said.
Rolls-Royce a year ago announced its first dividend cut since
1992 to maintain balance sheet health amid falling profits. The
company said it would pay a 7.1 pence final dividend or 11.7 pence
for the full-year compared with 16.4 pence for 2015.
Write to Robert Wall at Robert.Wall@wsj.com
(END) Dow Jones Newswires
February 14, 2017 02:50 ET (07:50 GMT)
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