Rolls Royce sticks with 2026 outlook despite Middle East disruption

(Alliance News) - Rolls-Royce Holdings PLC on Thursday said full-year guidance remains unchanged despite the Middle East crisis, as it reported a "strong start to the year across all three divisions."

Tufan Erginbilgic, chief executive of the London-based aerospace and defence company, said he expects the company to "fully mitigate the current financial impact of the disruption to our business" from the Middle East.

As a result, the FTSE 100 listing still projects GBP4.0 billion to GBP4.2 billion of underlying operating profit and GBP3.6 billion to GBP3.8 billion of free cash flow this year. In 2025, Rolls Royce reported underlying operating profit of GBP3.46 billion and free cash flow of GBP3.27 billion.

In response, shares in Rolls Royce rose 5.9% to 1,163.60 pence each in London on Thursday morning.

In a trading update for three months to March, Rolls Royce said it has made a strong start to the year across all three divisions.

Civil Aerospace performance was driven by the large engine and business aviation aftermarket, with business aviation flying hours ahead of budget, the firm said.

Large engine flying hours grew by 5% to 115% of 2019 levels in the three months to March. For the full year, Rolls Royce continues to expect large EFH at 115% to 120% of 2019 levels.

Demand for new widebody aircraft remains firm, it added.

In Defence, the company reported a strong start to the year driven by improved aftermarket performance alongside more than a 20% year-on-year increase in original equipment deliveries.

Power Systems also had a strong start to the year driven by power generation, led by data centres, and governmental.

Demand remains high, the firm said, with power generation order intake across gas and diesel engines in the first quarter around 50% higher than last year, and revenue growth was also strong.

March was a record month for orders, the company added.

CEO Erginbilgic said: "We have had a strong start to the year driven by our transformation and self-help, as we continue to further expand the earnings, cash, and growth potential of the business. Operational performance has also been strong across the group."

Half year results will be announced on July 30.

By Jeremy Cutler, Alliance News reporter

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