Rolls-Royce woes intensify after engine setback

The headwinds facing Rolls-Royce are intensifying after the aero-engine maker revealed another blow to profits and cash from its troubled Trent 1000 engine, and admitted that returns from the programme would suffer for several years to come. The FTSE 100 company on Thursday announced an extra GBP800m hit to cash as a result of the turbine blade problems on the engine powering Boeing’s 787 Dreamliner, taking the total expected cash cost between 2017 and 2023 to GBP2.4b. There was also a GBP1.4b exceptional charge to cover the cost of compensating customers and producing more spare engines, which will leave this year’s profits at the lower end of expectations. Warren East, CE, whose battle to drive profitability at the 113-year-old company has been hampered since 2017 by the Trent 1000 troubles, said he believed that the latest announcement would draw a line under the problems, which have left dozens of Dreamliners grounded around the world. “We have been prudent in our assessment,” he said. “We are reallocating funds so we can deliver certainty to customers.” Airlines have become increasingly frustrated by the group’s handling of the crisis in the Trent 1000 family, where turbine blades are degrading quicker than expected, which has forced aircraft to be grounded. Rolls-Royce has not had enough maintenance capacity or sufficient spare engines to ensure repairs can be carried out quickly, forcing airlines to adjust schedules for absent aircraft. “It is significantly harming our business,” said one airline customer. “We made the investment in the aircraft and its engines in order to get extra revenue, which we are not getting.” Story has more details.<br/>