Rolls-Royce Holdings PLC (LSE:RR.) swung back into profit in the first half of 2023 driven by improved margins, higher volumes and cost cutting.
The FTSE 100-listed engineer reported statutory revenue of £7.52 billion, up from £5.60 billion a year ago, with pre-tax profit of £1.42 billion swinging from a loss of £1.75 billion before. Operating profit jumped to £797 million from £223 million.
Rolls-Royce said the results reflected continued end-market growth, a focus on commercial optimisation and cost efficiencies across the group.
Margin improvements were led by Civil Aerospace and Defence, driven by higher volumes, commercial improvements, and cost efficiencies. Power Systems margins were lower but are expected to improve in the second half due to pricing actions.
The firm reaffirmed the raised guidance issued last week for underlying operating profit to £1.2-£1.4 billion and free cash flow to £0.9-£1.0 billion.
Chief executive Tufan Erginbilgic said: "Our multi-year transformation programme has started well with progress already evident in our strong initial results and increased full-year guidance for 2023.”
Basic EPS rose to 14.70p from LPS of 19.29p while free cash flow from continuing operations of £356 million compared to an outflow of £68 million in the prior period.