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The company left that segment more than a decade ago when it pulled out of a joint venture with Pratt & Whitney of the US.

Erginbilgic has made much of the fact that the company could use new engine technologies from its UltraFan programme to work with another supplier. The next generation UltraFan demonstrator engine aims to be 25 per cent more efficient than the group’s first Trent engines.

Whether he stays the course for this to happen — Erginbilgic is 64 years old — or whether it will be a challenge for a successor, remains to be seen.

For now, the focus will be on ensuring Rolls-Royce delivers on those new targets, including improving the earnings margins on its long-term service agreements with airline customers.

To get there, the company will not only need to charge higher prices and reduce its own costs, but also improve the durability or “time on wing” of its aircraft engines so they fly for longer before coming in for maintenance.

Rolls-Royce’s R&D engineers are now “focused on improving time on wing”, said JPMorgan’s Perry. “They will need to deliver the promised improvements?.?.?.?if Rolls-Royce is to achieve its targets.”

Graeme Forster, portfolio manager at Orbis, which bought into Rolls-Royce shares about seven years ago, argues that some credit is also due to Rolls-Royce’s “no-nonsense” chair, Anita Frew. Frew, who appointed Erginbilgic, has also overhauled the board since she herself started in October 2021.

Warren East, Erginbilgic’s predecessor, who ensured the company survived Covid and launched his own restructuring programme, including 9,000 job losses to save £1.3bn in costs, also deserves credit, according to Forster.

Company insiders say that in the short term at least, the outlook is good. With the latest commitment by Turkish Airlines to purchase more than 200 Airbus aircraft, including A350s which are powered by Rolls-Royce engines, 2023 will be the best year for Rolls-Royce in terms of new orders for 15 years.

A key mark of success will be when Rolls-Royce is upgraded to investment grade by all of the rating agencies. S&P Global upgraded it to BB+ in December. Some analysts believe a further shift higher could happen relatively soon, which could pave the way for the company to start paying a dividend again.

The engineer’s balance sheet will also benefit from not having to spend heavily on a new engine development in the medium-term. But one big strategic question still looms over Rolls-Royce: how does it re-enter the lucrative market for the engines powering narrow-body commercial airliners.

The targets, “actually mean a step change in performance”, Erginbilgic said, noting the company had already upgraded its 2023 guidance at the time of its half-year results in August.

“Those numbers in terms of cash and operating profit will be our best on record, while engine flying hours are still at around 86 per cent,” he said.

The group is aiming to increase operating margins to 13-15 per cent as part of the midterm plan. In its core civil aerospace business, it expects to achieve operating margins of 15-17 per cent, up from 2.5 per cent in 2022, a move that would bring it closer to rivals such as GE.

Nick Cunningham, analyst at Agency Partners, said the “underlying volume increase in engine flight hours and the underlying revenue increase from long-term service agreements is not a surprise”, noting that “China reopened at the beginning of [2023]”.

He nevertheless credits Erginbilgic with laying the foundations for better future performance. “A lot of what he is doing in terms of trying to improve the contract structure and the financial discipline — managing working capital, not writing new, bad contracts — those things pay off over time,” said Cunningham.

When Erginbilgic took over from his predecessor Warren East, he joined with a reputation as a formidable operator. Key priorities were to reduce the losses when the company makes and sells an engine, as well as to ensure that costs taken out during the restructuring did not creep back in once volumes returned as the industry recovered.

© Anna Gordon/FT

He has acted quickly to put his stamp on the organisation; almost half of Rolls-Royce’s senior executives, including former chief financial officer Panos Kakoullis, have changed positions or left as part of the restructuring and his move to centralise core functions such as human resources and purchasing.

Erginbilgic has been eager to stress a company-led turnaround rather than on that depends on the market.

“It is our actions that are driving the performance. It is not the environment,” he said at the company’s capital markets day in November where he announced new midterm targets for operating profits of up to £2.8bn by about 2027, four times the amount it reported in 2022.

He has a following wind from increased flying, strong defence [spending] and the strong US dollar; and little in the way of new product spend,” said one former industry executive. It would be hard to tell what impact his actions were already having, they added.

Rolls-Royce is no newcomer to restructurings. The 117-year-old company’s recent history is marked by successive turnaround plans launched by different chief executives.

The group is best known for building and maintaining large engines for passenger jets but it also makes turbines for fighter aeroplanes and reactors that power nuclear submarines. It also produces diesel and gas engines for ships and power generation.

Despite its longstanding position as Britain’s pre-eminent engineer, Rolls-Royce’s operating margins have historically underperformed those of larger peers such as America’s General Electric. More recently, its pursuit of trying to win market share from rival engine makers saw it sometimes sacrifice profitability and price.

It was also particularly badly hit by the pandemic due to its focus on building engines for widebody aircraft that fly long-haul, a segment of the market that suffered from the decline in international flying.

He has been brutally — and publicly — frank on Rolls-Royce’s shortcomings, shaking up senior management, announcing job cuts and setting ambitious financial targets.

Many investors and analysts have bought into the turnaround story, including longtime bear David Perry of JPMorgan, who in December issued an “overweight” rating on the stock for the first time since October 2014.

“I have never seen a CEO have such a positive impact in such a short period of time,” said Perry.

“Recovering market conditions have helped, but much of this recovery was expected 12 months ago. So we think most of the improvement in Rolls-Royce’s 2023 performance and its?.?.?.?upgraded financial targets is down to initiatives implemented by Erginbilgic and his team,” he added.

Despite the enthusiasm among many towards the new CEO, others are keen to stress that while he can take credit for bringing in greater cost discipline, he has been fortunate with timing — notably the dramatic rebound in global travel as well as the rise in defence spending by governments.

The company makes most of its money from long-term service agreements on its passenger jet engines, and the recovery in international air travel, notably in the Asia-Pacific region, has brought more cash flowing in.

Ttps://www.ft.com/content/2cffd498-5cbc-454c-8b00-2f610feb3600

Investors cheer sharp shift in fortunes at Rolls-Royce

New CEO Tufan Erginbilgic has stressed turnaround has been company-led but some see environment helping

An UltraFan Demonstrator on test at Rolls-Royce

The next generation UltraFan demonstrator engine aims to be 25% more efficient than the group’s first Trent engines © Rolls-Royce

Investors in Rolls-Royce, who in recent years have had little reason to celebrate, are in a cheery mood at the start of the new year.

Rising 224 per cent in 2023 to 299.7p, the FTSE 100 engineer’s shares have recorded their best annual performance since the company was privatised in 1987, heading the list of top gainers in the Stoxx 600 of Europe’s largest listed companies in 2023.

The sharp shift in the company’s fortunes on the stock market has coincided with the arrival of chief executive Tufan Erginbilgic, the oil industry veteran who took the controls at Rolls-Royce in January 2023 with a mandate to improve performance and drive down costs.

Some analysts believe a further shift higher could happen relatively soon, which could pave the way for the company to start paying a dividend again.

Whatever peeps think a 19m trade during a normally very quiet period is eyebrow raising. Someone is accumulating and trying to hide it. Or someone knows something that we don't.

To br fair Larry66 deserves braggings rights also.

I bought in at 101p and it was pretty obvious things were about to happen. It was almost the same a BAE where I bought in at 99p back in 1992 (SHare splits rights etc since)I also bought Taylor Wimpey at 7p after Aviva dumped them at 4p. Assets £4Bn debt 1Bn MKT CAP £100m. Then GKP at 14p before it rose over a pound. Basically once in ten years a great opportunity comes along which is so obvious yet many dont see it. SO here's my prediction for the year ahead.

RR has tripled but next year it will double and more. Shall we say £8?

Happy NEW YEAR everyone.

Kazakhstan’s state miner Kazatomprom is by far the largest producer, with 23pc market share, according to the World Nuclear Association (WNA).

Other top miners include Canada’s Cameco (12pc), France’s Orano (11pc), China General Nuclear (10pc) and Russian state owned Uranium One (9pc).

Producers are struggling to respond quickly to increased demand, in part because of how long they were stuck in low gear. Cameco in September slashed the 2023 production forecast for its Cigar Lake mine from 18 million pounds to 16.3 million pounds, citing equipment problems.

Adding to supply pressure is the fact that US lawmakers are pushing for a ban on imports of Russian uranium, with a bill passed in the House of Representatives earlier this month waiting to clear the Senate.

That will make life harder for American utilities, which currently source about 12pc of their supplies from Russia and about 25pc from Kazakhstan, which has historically shipped uranium out of St Petersburg.

Since the Ukraine war erupted, Kazatomprom has sought to reduce its reliance on Moscow for getting uranium to the West, sending more via what it calls the “trans-Caspian route” – or the “new nuclear Silk Road” to some analysts.

Getting uranium to the US via St Petersburg reliably takes around 32 days. However, sending it west along this new Silk Road takes 43 days and is riskier and more expensive.

Yellowcake has to be sent first by rail to the Kazakh port of Aktau, then is shipped across the Caspian sea to the port of Baku in Azerbaijan, which is in conflict with neighbouring Armenia, before travelling by rail again to the port of Poti in Georgia.

It is then sent by ship through the contested Black Sea – hugging the coast of Turkey all the way – before passing through the Bosphorus strait and into the Mediterranean.

Kazatomprom claims it is now sending as much as 70pc of western supplies this way. But the route’s riskier nature has led to fears that the company may instead end up dealing more with China, which has built an enormous warehouse near its border with Kazakhstan to store trainloads of uranium that are constantly arriving.

Some western commentators have pointed to Australia as a solution to the crunch, where the world’s biggest reserves of uranium are buried. However, Ocean Wall’s Finegold argues there are not enough projects underway yet to even begin to address the global shortfall.

He believes the only answer is for western miners to open a generation of new pits, but this will take time.

“There has to be a higher incentive for Western production,” he explains, “whether that’s higher prices or a slightly more relaxed regulatory framework.”

Back in Somerset, operator EDF says it has already safely secured the uranium needed to fuel Hinkley Point C from countries including Kazakhstan and Canada.

That is reassuring for now. But if the UK wants to build yet more nuclear reactors, we had better star

In the past decade, production of raw uranium concentrate (known as yellowcake) has plunged from a peak of 69,966 tonnes in 2013 to 58,201 last year. According to the WNA, that is more than 10,000 tonnes below current reactor requirements – let alone planned ones.

The malaise set in after the 2011 Fukushima nuclear disaster in Japan, which prompted some countries such as Japan and Germany to shut down reactors.

This caused utility firms to flood the market with excess fuel, sending the price of uranium crashing to levels that made mining unprofitable, particularly for western operators.

Worse still, when the Covid pandemic struck in 2020 some miners were forced to halt activity altogether.

It has created a supply deficit of the kind unseen for many years, forcing European and American utilities to draw down on inventories built up over years.

Now, those stockpiles are dwindling.

“Inventory is a finite resource, and at some point they run out,” says Malcolm Critchley, president of US uranium processor ConverDyn. “And then you’re faced with a sort of fundamental problem in the market, where supply is lagging behind demand.”

Uranium supplies will be stretched for years to come. The simplest explanation for the supply crunch is that countries are building a huge number of reactors, in many cases to cut their carbon emissions and achieve 2050 “net zero” targets.

Worldwide, in addition to the 61 reactors being built, another 112 are in the planning process (including two at Sizewell C in Suffolk). A further 318 are proposed in some form, the WNA says.

This construction boom is largely driven by enormous programmes in China and India, as well as Middle Eastern countries including Turkey and Egypt.

The scale of China’s programme alone is staggering. There, the number of reactors in operation has risen from 17 to 55 since Fukushima – a period during which the UK started but failed to finish a single one.

Meanwhile, another 25 are under construction and plans are being drawn up for nearly 200 more.

That has prompted Beijing to build a massive stockpile of uranium as well.

Uranium

In the past decade, production of raw uranium concentrate (known as yellowcake) has plunged from a peak of 69,966 tonnes in 2013 to 58,201 last year Credit: Handout Publicity Material

Over the next 15 years, Ocean Wall predicts China could hoover up one billion pounds (about 454,000 tonnes) of the metal, equivalent to roughly half of all global supplies if production remained static.

Other factors are pushing up prices as well. Many older reactors are now expected to run for longer, after countries including the UK, US and France opted to extend their lifetimes, while some that were idled in Japan are being brought back online.

Uranium mining is dominated by a small cabal of countries and businesses, with parts of the supply chain heavily concentrated into a few hands.

Kazakhstan’s state miner Kazatomprom i

Https://www.telegraph.co.uk/business/2023/12/23/scramble-uranium-supplies-new-nuclear-silk-road/

Scramble for uranium supplies on new nuclear Silk Road

Decade-long supply crunch fears grow as miners fail to access the metal quickly enough

Matt Oliver 23 December 2023 • 12:00pm

Uranium

Since the Ukraine war erupted, Kazatomprom has sought to reduce its reliance on Moscow for getting uranium to the West, sending more via what it calls the ‘trans-Caspian route’ Credit: Olivier Martel Savoie/The Image Bank Unreleased

Already stretched uranium supplies are set to come under further pressure as dozens of new nuclear power plants come online globally

Britain’s long-promised nuclear renaissance edged forward this month, as a crane swung a gigantic domed roof into place on a reactor building at Hinkley Point C in Somerset.

Emblazoned across it, a large banner declares: “Helping Britain achieve net zero”.

The site’s two reactors, which are expected to come online in 2027, are among 61 being built around the world, as more countries turn to nuclear to help cut their carbon emissions.

Yet with hundreds more planned, experts are now asking where all the uranium to fuel them will come from. There is a worrying lack of answers.

The uncertainty has driven the price of the radioactive metal to heights not seen in more than a decade.

Hinkley Point C

The world’s largest crane has been used to place a roof wider than the dome of St Paul’s Cathedral on top of the Hinkley Point C Credit: Handout/AFP

On the same day Hinkley’s reactor building was crowned, the price of uranium jumped to $85.75 a pound on the spot market.

That is the highest level since January 2007 and compares to just $24 per pound at the start of 2020.

This month, Morgan Stanley analysts predicted it will rise to $95 in the first half of next year, while others believe it could easily go much higher.

The driving force is the fear of a decade-long supply crunch, as demand for uranium ramps up but miners struggle to get the metal out of the ground quickly enough.

Demand is forecast to reach 180 million pounds this year alone, compared to just 130 million pounds of expected production, according to London research company Ocean Wall, a uranium specialist.

Normally in a situation like this, high commodity prices would prompt miners to rapidly invest in new projects to boost overall supplies. But uranium is a different story, says Ben Finegold, an analyst at Ocean Wall.

Reopening mothballed mines will barely move the needle on supply globally. Meanwhile, it typically takes more than a decade to open new ones.

“The supply response is going to be so slow,” Finegold says.

“Frankly, if the uranium price were to jump to $500 a pound tomorrow, it would do very little for meaningful volumes of supply in the short to medium term.”

Mining uranium is more complicated than mining other precious metals, partly due to restrictions

Https://www.telegraph.co.uk/business/2023/12/23/rishi-sunak-scale-back-nuclear-target-net-zero-climbdown/#comment

Sunak to scale back nuclear target in latest net zero climbdown

Move echoes decision to delay 2030 ban on new petrol car sales

Matt Oliver and Jonathan Leake 23 December 2023 • 4:00pm

Claire Coutinho due to announce lower target on gigawatts capacity

Claire Coutinho due to announce lower target on gigawatts capacity Credit: OLI SCARFF/AFP

Ministers are preparing to scale back the UK’s nuclear power target in Rishi Sunak’s latest net zero climbdown.

Draft versions of a new “nuclear roadmap” circulating in Whitehall suggest Claire Coutinho, the Energy Secretary, will next month commit to building a minimum of 16 gigawatts of capacity by 2050, The Telegraph understands.

Under Boris Johnson, as prime minister, the Government promised up to 24 gigawatts of capacity by the middle of the century.

It is also understood the roadmap will not include an interim target for 2035, despite this being a key recommendation of a net zero review published in January.

The lower target is thought to follow private warnings from some parts of industry that Britain lacks the required workforce and supply chains to deliver reactors at the pace needed to reach the 24-gigawatt goal.

It is the equivalent of several major reactors not coming online. For comparison, Hinkley Point C, which is currently under construction, is expected to generate 3.2 gigawatts when it becomes operational.

It is envisioned that nuclear capacity will come from both “gigawatt-scale” plants and small modular nuclear reactors, which are a new generation of factory-built, mini-power stations.

A Whitehall source on Friday suggested that the final target remained a subject of internal debate, with Ms Coutinho still supportive of an ambition to reach 24 gigawatts.

Mr Sunak, the Prime Minister, is also understood to be enthusiastic and wants to see nuclear power generation return to levels not seen since the 1990s, when it peaked at around 30pc.

At the Cop28 conference in Dubai this month, he joined 21 other world leaders to pledge a tripling of nuclear capacity by 2050.

However, the more cautious minimum target underlines the uncertainty still surrounding parts of Britain’s nuclear programme, including how quickly it can be delivered.

It echoes Mr Sunak’s decision earlier this year to delay a 2030 ban on new petrol car sales over fears that the country’s electric car infrastructure was not developed enough.

The UK has not completed a new nuclear power station since 1995, when Sizewell B in Suffolk came online.

Meanwhile, Hinkley Point C in Somerset, the only plant under construction, has been plagued by delays and cost overruns that threaten to push back the start of generation to the 2030s, compared to an original target of 2025.

Earlier this month it was reported that the price tag for the scheme is now set t

Https://www.nasdaq.com/articles/rolls-royce-can-grow-market-share-and-improve-profit-says-ceo

Https://www.rolls-royce.com/media/our-stories/discover/2023/rolls-royce-starts-new-set-of-ground-breaking-hydrogen-research-tests.aspx

The airline that flies out to Area 51 from Vegas is called Jane. Its a complete mystery how the flights just vanish.

Https://fortune.com/europe/2023/12/20/rolls-royce-ceo-tufan-erginbilic-burning-platform-best-stock-performance-30-years/

Tufan Erginbilgiç, Rolls’ chief executive, met with Czech ministers last week to kick off negotiations for an SMR deal, as the company battles to get firm orders.

Rolls-Royce in talks to build mini-nukes in Ukraine

Kyiv is seeking to decentralise its energy systems amid a continued Russian onslaught

Matt Oliver and Howard Mustoe 17 December 2023 • 6:00pm

DTEK boss Maxim Timchenko

DTEK boss Maxim Timchenko is seeking to establish a partnership with Rolls to convert coal powered station to nuclear Credit: Paul Grover

Rolls-Royce is in talks with Ukraine’s biggest private power company to build a string of mini nuclear power plants in the country, The Telegraph can reveal.

DTEK, which is part of billionaire businessman Rinat Akhmetov’s industrial group, has held early discussions with Rolls about developing small modular reactors (SMRs) at sites currently operated by coal power stations.

Maxim Timchenko, the company’s chief executive, said he expects nuclear power to form an important part of DTEK’s future portfolio as Ukraine is rebuilt and his country switches away from fossil fuels.

DTEK and Rolls are examining whether up to eight existing coal power station sites, two of them currently in territory occupied by Russia, could eventually be converted to house SMRs in the 2030s.

It comes as Ukraine is scrambling to deploy less centralised and more renewable sources of energy, such as wind and solar farms, in the face of a targeted bombing campaign by Russia to take out grid infrastructure during the harsh winter months.

In May, DTEK began generating power from the Tyligulska wind farm, 60 miles from the frontline of the war, in southern Ukraine, which was assembled during wartime in just nine months. This month it announced plans to quadruple the site’s capacity.

Mr Timchenko said renewables remained key to boosting energy security as individual wind turbines make much harder missile targets than large coal power plants. However, he said a large chunk of power will also need to come from less intermittent sources such as nuclear.

In an interview, he told The Telegraph: “We are trying to find a way to install these SMRs.

“From our side, we have quite a big capacity of coal-fired power stations and we are in discussions with Rolls-Royce SMR to convert [them].”

Ukraine is already one of the world’s biggest users of nuclear power, with the state owning four plants that generated more than half of the country’s power before Vladimir Putin ordered Russia’s military to invade.

One of the sites, the Zaporizhzhia Nuclear Power Plant, now sits in occupied territory and has become a flashpoint, with Ukraine and Russia each accusing each other of reckless shelling that risks setting off a nuclear disaster.

The SMR being developed by Rolls is a new and commercially-unproven technology that the company does not expect to deploy until 2030 at the earliest, with the first expected to be built in the UK.

DTEK is seeking to establish a partnership with Rolls that could see some of the supply chain eventually set up in Ukraine, where there is significant nuc