(Alliance News) - Rolls-Royce Holdings PLC on Thursday said its performance for its financial year to date has been in line with expectations, allowing the group to keep its guidance for 2022 unchanged.
The London-based jet engine maker said it is well positioned for anticipated growth in its end markets and continues to expect positive momentum in its financial performance despite ongoing macroeconomic risks.
In the Civil Aerospace business, Rolls-Royce's large engine long-term service agreement flying hours for the first four months of 2022 were 42% higher year-on-year, as passenger demand recovers on routes where travel restrictions have been in lifted, such as in Europe and the Americas.
Meanwhile, the group's Defence business has a strong order backlog, giving the group confidence on revenue, profit and cash conversion, even with the headwinds of inflation and supply chain risk. However, operating margin is set to be lower for the year, reflecting original equipment and aftermarket mix changes and a planned rise in investments.
In addition, the Power Systems segment reported strong order intake across the business, particularly in power generation and defence end markets.
Looking ahead, for the medium term Rolls-Royce expects Civil Aerospace's underlying revenue to grow at a low double-digit percentage from 2021, with an operating margin percentage in the high single digits.
"We are confident that we have positioned the business to achieve positive profit and cash this year, driven by the benefits of our cost reductions and increased engine flying hours in Civil Aerospace together with a strong performance in Defence and Power Systems, and balanced by our commitment to invest in technology and systems that are critical to the leading sustainable solutions we are delivering now and in the future," said Chief Executive Warren East.
Rolls-Royce will publish its interim results on August 4.
Shares in Rolls-Royce were up 0.1% at 80.57 pence each on Thursday morning in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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