Aircraft engine and turbine maker Rolls Royce reported a 4 percent jump in its full year profit in 2010 and said charges related to the Australian carrier Qantas engine blowout has been factored in last years results.
Pretax profit was reported at £955 million, beating analysts’ expectation of £939 million, due to strong growth in its civil airlines engine and energy units. Sales for the year were up 6 percent over 2009 and were recorded at £11.08 billion.
The company had suffered two major setbacks last year. Its engine for the Boeing 787 Dreamliner had hit technical snags during ground testing, which resulted in delay of the launch of the aircraft while in another separate incident, one of its engines in an Airbus A380 had blown up mid-air. Qantas had immediately grounded A380 aircrafts powered by Rolls engines.
Rolls said it has absorbed most of the costs related to the Qantas debacle, estimated at £56 million, in 2010 results.
Due to strong growth in the civil aviation sector, Rolls said it hopes to post better results in 2011.
The chief executive of the world’s second largest engine maker – behind General Electric, said in a statement: “Group underlying profits in 2011 are expected to see good growth benefiting from a strong trading performance in the civil aerospace business, a better revenue mix, improved achieved foreign exchange rates and a continued focus on cost control”.
The company in its projections said that strong demand from emerging economies will offset weak growth in the developed countries.
The airlines industry has recovered much faster than anticipated and both Boeing and Airbus saw sharp jump in demand in the second half of 2010. However, industry trade body IATA cautioned earlier this month that rising fuels costs may slowdown recovery and hit airlines profitability.