©Reuters. FILE PHOTO. An Airbus A350 is photographed with the Rolls-Royce logo at the Airbus headquarters in Toulouse, France
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LONDON (Reuters) – Rolls-Royce (LON:) performed in line with expectations in the first four months of the year, the engine maker said on Thursday, helped by a gradual return to flying and increased government investment. in defence.
The UK company reiterated its forecasts and set a medium-term outlook for its civil aerospace division, saying it expects underlying revenue growth at an average low double-digit compound growth rate from 2021 and an operating margin percentage of high single digit.
The company expects trading cash flow to far exceed operating results.
Rolls has been hit hard by the pandemic as a large part of its revenue is tied to the number of hours flown on its engines by its airline customers.
In its civil aerospace unit, flight hours for its long-term service agreement for large engines increased 42% from the previous year, thanks to the recovery of passenger demand in cases where the restrictions of the COVID-19 have decreased.
In the defense sector, it stated that the products it supplied were delivered and maintained for decades, meaning they are not exposed to specific geopolitical events. However, he stated that the increase in public spending was supportive of long-term growth prospects.
The company, which is seeking a replacement for CEO Warren East, also said it was working with suppliers across its various divisions to limit disruptions.
“Our long-term sourcing agreements and hedging policies designed to limit the volatility of commodity inflation offer some short-term protection and we have increased inventory levels to help mitigate the impact,” he said.
(Edited in Spanish by Benjamín Mejías Valencia)
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