Positive First Quarter Results for Rolls-Royce

During the first quarter of 2008, Rolls-Royce confirmed around $14.7 billion of new business. This included firm and option orders plus long-term service agreements worth $14.4 billion for the Trent engine family, already making 2008 the company’s second most successful  year for Trent orders.

A major milestone was also reached in Trent production with the groundbreaking of the new $225 million ‘Facility of the Future’ in Singapore. This will be the most modern Rolls-Royce production assembly and test facility for large commercial aero engines. It will also be its first such facility in Asia, bringing Rolls-Royce closer to customers, including its long-term partner Singapore Airlines, whose future fleet will include engines assembled locally.

The Trent 700, the first member of the Trent family to enter service, continued to demonstrate competitive advantage, retaining its leading position on the A330 with a 53% market share. It won $6.4 billion of business during the quarter, with orders and options for up to 192 engines, all covered by long-term service agreements. This included the AirTanker consortium’s winning bid in March to power the UK Ministry of Defence’s new fleet of 14 Airbus A330 tanker aircraft. Rolls-Royce will not only supply Trent 700s but will also provide full support for the engines. Its share of this contract is estimated to be worth more than £700 million over the programme’s 27-year life.

Growing success in international markets was illustrated by the marine business’s first offshore contract in China, worth £58 million. Rolls-Royce will design and equip two of its UT 788 offshore support vessels for China Oilfield Services Ltd.

The company’s product portfolio continued to expand, with the launch in March of the BR725, its fourth new engine launch in just over 12 months. The engine will power Gulfstream’s new flagship corporate jet, the G650. The engine combines proven features of the BR700 and Trent engine families with new technologies derived from the group’s ‘Vision’ technology acquisition programmes.

Another new engine programme, the RR300 gas turbine for Robinson Helicopters' new R66, became the first engine to roll off the newly-commissioned small engine assembly line at the Rolls-Royce facility in Indianapolis, US. The engine has also received both FAA Type and Production Certification ahead of schedule.

In January, Rolls-Royce took a further step in its continuing programme to improve its global efficiency and competitiveness. Proposals were announced to improve the efficiency of its overhead structure by reducing managerial, professional and clerical staff by up to 2,300 on a worldwide basis.

In February, Rolls-Royce announced its Preliminary Results for 2007, reporting strong progress during the year. The company delivered underlying sales and profit growth across all businesses and good cash flow, despite the continuing challenges of a weak US dollar and increased unit costs. The order book increased by 76% to a record £45.9 billion at the end of December as a result of a strong order intake across all businesses. Underlying sales increased by 6% to £7,817 million and underlying profit before tax increased by 13% to £800 million (2006 £705 million). 

The Group will issue its interim management statement at the Annual General Meeting on 7 May 2008.

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