Rolls-Royce profit slumps as it battles inflation, supply-chain disruption

Aero-engineer Rolls-Royce (RR.L) disappointed investors by reporting a bigger-than-expected fall in first-half profit on Thursday, underscoring the challenge facing its new CE of restoring the health of its civil aviation business. Shares in Rolls-Royce fell 7.5% after the British company, whose engines power the Airbus A350 and Boeing 787, reported its underlying operating profit fell to GBP125m ($152m) from 307m a year earlier, missing consensus by 24%. Its civil aviation business reported an underlying operating loss of GBP79m ($96m) despite a 43% increase in flying hours, a key driver of revenue. CE Warren East, who will be succeeded by ex-BP executive Tufan Erginbilgic at the end of the year, pointed to an improvement in free cash flow of GBP1.1b and strong order intake in its power systems business. He said cash flow was still expected to be "modestly" positive for the whole year, after a cash burn of GBP68m in the first half.<br/>