Rolls-Royce Holdings PLC (LSE:RR.) has doubled down on guidance despite ongoing supply chain issues as demand across the defence and civil aerospace sectors remains strong.
Full-year guidance for operating profit of £2.1 billion to £2.3 billion and free cash flow between £2.1 billion and £2.2 billion was reiterated in a third quarter update on Thursday.
This was despite ongoing challenges in the aerospace supply chain, the company said, after efforts to concentrate on 15 suppliers have “driven performance improvements”.
“Our transformation of Rolls-Royce into a high-performing, competitive, resilient and growing business continues with pace and intensity,” chief executive Tufan Erginbilgic said.
“Continued good performance year to date gives us further confidence in the delivery of our 2024 guidance despite a supply chain environment which remains challenging.”
Demand across both the defence and aerospace sectors was said to have remained strong as engine flying hours in the latter exceeded pre-pandemic levels.
Rolls-Royce’s large engine flight times were up 18% against last year and at 102% of 2019 levels in the ten months to October, in line with guidance for 100% to 110%.
Double-digit revenue growth was recorded in Rolls-Royce’s power generation business, the company added, while government orders for power systems were strong.
The company noted activities in its Electrical's Advanced Air Mobility wing were closed in September, coinciding with the sales of its lower power engine business and naval propulsors segment.
Erginbilgic added Rolls-Royce was making good progress towards mid-term targets as profit and cash flow improved.
“There is more we still need and want to do, as we expand the earnings and cash potential of Rolls-Royce,” he said.