Aircraft engine orders help Rolls' profits soar
ENGINEERING firm Rolls-Royce says it is looking forward to another successful year.
The firm, which employs around 4,000 people at its factory in Patchway, enjoyed a healthy year in 2011. As reported in the Post, a lot of the success of the aviation and engineering firm was linked to ongoing military operations in the Middle East.
And Rolls says it is looking forward to another successful financial performance thanks to the growing demand for fuel-efficient commercial planes.
Rolls makes engines for plane makers Airbus and for its rival Boeing.
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Much of Airbus's current huge growth and success has been based on its creation of a new generation of efficient planes. Demand for the new aircraft has been staggering and propelled Airbus into pole position in the aviation industry.
As a result there has been a big increase in demand for engines and Rolls-Royce is confident its profits will rise again this financial year.
Allied to this is the relentless demand for travel to and from Asia's fast growing mega-cities.
Rolls said it has made a good start to the year and that its key civil aerospace unit, which accounts for half of the firm's sales, would lead strong profit growth.
According to industry sources, airlines will buy $3.5 trillion of aircraft over the next 20 years to meet demand for travel to and from emerging markets – especially in Asia. At the same time Airlines also need to renew their ageing fleets serving airports in the Western hemisphere.
According to Rolls there is soaring demand for narrow body jets such as the Airbus A320. Analysts forecast that 20,000 narrow body planes will be built in the next 20 years.
Rolls reported a 21 per cent rise in 2011 profits and has more than 5,000 engines – worth some £52 billion – currently on its order books.
Rolls' growth last year was boosted by the acquisition of German engine maker Tognum and the sale of its stake in International Aero Engines.
Shares in the firm have risen 16 per cent over the last 12 months and are now worth around 850 pence – the highest in the sector.
Its shares have outperformed the FTSE All Share aerospace and defence index by 23 per cent in the last year.
Investec analyst Andrew Gollan said: "Things move slowly in aerospace and defence, but for Rolls-Royce, a super tanker with positive momentum, that is just fine."