Underlying profit at Rolls-Royce fell by 12 per cent to £1.4bn ($2bn) in 2015, the OEM said in full-year results posted on Friday (February 12).
Underlying aftermarket revenues in its civil aerospace division rose by three per cent year on year to £6.9bn ($10bn), but its underlying profit fell 14 per cent compared to 2014 to £812m ($1.1bn).
Rolls-Royce attributed the reduced profit numbers to “adverse mix effects” of higher R&D charges partially offset by the impact of life-cycle cost improvements, retrospective long-term contract accounting benefits, a reversal of impairment of contractual aftermarket rights and lower restructuring costs.
The British engine manufacturer, which has posted five profit warnings in the past two years, forecast a pre-tax profit of £664m ($964m) for 2016.
The firm’s CEO Warren East also warned of further cost reductions in addition to the recently announced £200m ($290m) savings Rolls-Royce plans to implement in 2016.