Rolls-Royce predicts flat profits
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Rolls-Royce expects its revenue in 2014 to be 3.5% to 4% lower than 2013. It said: "In the last few months economic conditions have deteriorated and Russian trade sanctions have tightened, leading a number of customers to delay or cancel orders particularly in our nuclear and energy and power systems businesses."
However, the company claimed to have made good progress on cost. As a consequence, it said: "We are maintaining guidance for group underlying profit as flat in 2014... We are determining what more can be achieved through further restructuring and rationalisation."
John Rishton, Rolls-Royce chief executive, added: "While the short term is clearly challenging, reflecting the economic environment, the prospects for the group remain strong, driven by the growing global requirement for cleaner, better power. The operational efficiencies already achieved and the cost programmes we will now accelerate will put us in a better position to benefit from these growth drivers."
On a business level, it expected civil aerospace revenue to be maintained at +2% to +5%, defence aerospace revenue at -15% to -20%; marine at around -10%; power systems at +/-2%; and nuclear and energy revenue at 0% to +5%.
The company said: "Since our interim results, the economic outlook for 2015 has become more challenging. In response to these external factors we will increase our focus on areas we can control... particularly on cost...
"Our current best estimate for 2015 is that group underlying revenue will be in the range of +/-3% and profit in the range of 0% to -3% compared with our expected outcome for 2014 at constant exchange rates."
