- CEO Tufan Erginbilgic says Rolls has overcome supply chain and tariff challenges
Rolls Royce profits soared 50 per cent in the first six months of the year amid growing demand for its jet engines.
Shares in the British engineering giant rocketed more than 10 per cent on Thursday morning after Rolls hiked its earnings forecast for the year.
The upgrade came after a bumper first-half saw profits hit £1.7billion – compared with £1.1billion a year earlier – and revenue jump 11 per cent from £8.2billion to £9.1billion.
Rolls-Royce raised its full-year profit guidance from between £2.7billion to £2.9billion to £3.1billion to £3.2billion.
And chief executive Tufan Erginbilgic said the company had overcome supply chain and tariff challenges and is on track to meet its target of profits of up to £3.9billion by 2028.
Erginbilgic has been credited with turning the 119-year-old company’s fortunes around.
Boss Tufan Erginbilgic has been credited with turning the 119-year-old company’s fortunes around
Rolls-Royce shares are up more than 85 per cent so far this year and are worth nearly 10 times more than they were when the former BP executive took the reins in 2023.
The half-year results gave ‘further confidence for mid-term targets’, Erginbilgic said, adding that the goal was ‘a milestone not a destination’ with ‘growth prospects beyond the midterm’.
Demand for Rolls-Royce’s jet engines has been boosted by the recovery of international travel since the pandemic.
In the first six months of the year, Erginbilgic said Rolls-Royce had improved the time its engines spend ‘on wing’ – meaning the hours engines spend powering planes before needing maintenance – and the profitability of its maintenance services.
And the company shrugged off the impact of Donald Trump’s tariff war, including by taking ‘pricing actions where appropriate’ and making cost efficiencies.
‘By February we were already ready,’ Erginbilgic said.
‘We didn’t know what to predict. In an uncertain world, my personal belief is that a company’s job is not to predict what s going to happen but to gear up to respond.
‘They need to have the mindset and response capability.’
He added: ‘Our processes were aligned before tariff numbers hit, we were very quick to go to the mitigations.’
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: ‘Rolls-Royce continues to soar above expectations, delivering yet another set of high-flying results and profit guidance upgrades.
‘The group produces aeroplane engines for larger, long-haul planes. Revenues are being boosted by the upward trend in engine-flying hours, which are now cruising well above pre-pandemic levels.’
Chris Beauchamp, chief market analyst at IG, said: ‘Rolls-Royce’s near tenfold rally since early 2023 reflects strong execution, rising profits and growing cash returns.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .