Troubled Rolls-Royce cuts dividend, logs mixed earnings

12th February 2016, Comments 0 comments

British engines maker Rolls-Royce on Friday slashed its shareholder dividend and warned 2016 would also be challenging, and posted mixed annual earnings.

Net profit, or earnings after taxation, rose 20 percent to £83 million ($120 million, 106 million euros) last year compared with 2014, the company said in a results statement amid its ongoing restructuring.

However, underlying profit fell 12 percent at constant exchange rates to £1.43 billion, while sales dipped one percent to £13.4 billion.

The London-listed firm -- which supplies engines to aviation giants Airbus and Boeing -- also cut its full-year dividend to 16.37 pence from 23.1 pence and repeated its gloomy outlook.

"Our outlook for 2016 is unchanged," said Warren East, chief executive of the group that issued six profit warnings over the last two years as slumping oil prices have hit demand for vessels.

"Despite steady market conditions for most of our businesses it will be a challenging year as we start to transition products and sustain investment in civil aerospace and tackle weak offshore markets in Marine," he added.

Late last year, Rolls-Royce announced changes to its top management structure, resulting in the departure of its head of aerospace.

The removal of a layer of senior management represents a first step in a company-wide restructuring launched by East, who took the helm in July.

Rolls, which makes engine systems for aircraft and sea vessels, is looking to make cost savings of £150 million-£200 million from 2017 under the restructuring plans unveiled in November.

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© 2016 AFP

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