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Aerospace

Rolls Royce military contracts set to ensure guaranteed income, but debt a concern in upcoming results

Analysts expecting the engine maker to continue showing gradual signs of recovery

Rolls-Royce Holdings PLC (LSE:RR.) is set to provide a quarterly report on Thursday 3 October, with analysts are expecting the airline engine manufacturer to continue showing gradual signs of recovery after it was hit during the pandemic.

Underlying revenue has been seen to improve throughout the year, particularly for the power systems and civil aerospace markets according to Susannah Streeter, senior analyst at Hargreaves Lansdown.

Military spending will see the company retain a significant level of income, with restructuring also set to shore up its balance sheets, outlined Streeter.

However, she highlighted the slow progress of aviation industry in restoring pre-pandemic demand levels will likely continue to hit Rolls Royce, given its core aircraft engine manufacturing and service business.

On top of this, the company has been affected by supply chain difficulties, a situation investors hope to see has improved when results are released, says Streeter, but debt levels remain a concern.

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