Rolls-Royce predicts profit and cash flow to perform better than anticipated

By Bruno Reis

The UK-based automaker and aircraft engine manufacturer, Rolls-Royce, has revealed its forecast that its group profit and free cash flow for 2018 will sit in the upper half of its guidance range.

The firm had previously anticipated that its group operating profit would sit between £300mn (US$379.mmn) and £500mn ($631.8mn).

As for free cash flow, Rolls-Royce predicted the figure would fall between £350mn ($442.3mn) and £550mn ($695mn), Reuters reported.

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Supplying engines to airline form the company’s largest business. With airlines flying their planes for longer, Rolls-Royce was able to generate more earnings from maintenance.

The firm’s share increased by 2.5% during early trading in London on the day of announcement, 12 December.

Rolls-Royce are currently working on a restructuring plan, that will include the reduction of jobs.

“We are confident that the end result will be a simpler, leaner and more agile organisation that drives culture change through pace, simplicity, efficiency and empowerment,” Rolls-Royce stated according to the Financial Times.

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