The civil aerospace division of Rolls-Royce has seen its 2016 underlying profit before finance charges and tax decrease by 60% compared to the previous year to £367 million ($457.3 million).
In full-year results published today (February 14), the Derby-headquartered engineering firm said underlying revenues in its civil aerospace unit remain unchanged at around the £7.6 billion ($8.7 billion) mark.
It revealed deliveries of newer Trent engines increased but these were offset by lower sales of the mature Trent 700 engines along with business aviation transactions. In its aftermarket services unit, Rolls-Royce said there was growth from its in-production large engine fleet, but aftermarket revenues declined in regional and older larger engine fleets along with increased technical costs for large engines including the Trent 700 and Trent 900 variants.
However, the British engine maker’s group profits showed an overall pre-tax loss of £4.6 billion ($5.7 billion) – a company record.
Rolls-Royce cited the fall in the value of the pound and a £671 million ($836.2 million) bribery settlement as factors in the shortfall.
While Rolls-Royce predicts modest growth in its civil aerospace division in 2017, it said it remains confident about the long-term outlook of its commercial activities, which account for more than 50% of all group revenues.
“The successful roll-out of new engines, led in particular by the Trent XWB, 1000 and 7000, together with a growing aftermarket, is expected to drive significant revenue growth over the coming ten years as we build toward a 50% plus share of the installed widebody passenger market,” the statement read.