LONDON (Reuters) -British engineering company Rolls-Royce stuck to its forecasts for 2022 despite facing headwinds from the rising cost of energy and raw materials and supply chain snags which have led to higher levels of inventory.
The group, whose engines power the Airbus A350 and Boeing 787, is aiming for low-to-mid-single digit underlying revenue growth, a profit margin broadly in line with last year’s 3.8% level and modestly positive cash flow.
Warren East, overseeing quarterly results for the final time before he retires after seven years as chief executive, said that the company was continuing to recover from the pandemic, and that cuts made during COVID-19 had positioned it well for the uncertain economic environment.
He will be succeeded by ex-BP executive Tufan Erginbilgic at the end of the year, who will have to manage the issue of rising costs and supply chain hold-ups that are putting pressure on manufacturers across the world.
Rolls-Royce said in its statement on Thursday that it aims to recover cost inflation through operational efficiencies and increased pricing.
During the year, Rolls has repaid 2 billion pounds ($2.27 billion) of debt taken on during the pandemic and said it is on track to return to investment grade in the medium term.
Shares in Rolls-Royce have lost 32% of their value this year, underperforming Britain’s bluechip index which is down 3%.
($1 = 0.8802 pounds)
(Reporting by Sarah Young; editing by James Davey)
