Source AP ©

Rolls-Royce 1st half net profit decreases by half

The World’s second largest maker of aircraft engines Rolls-Royce Group PLC said Thursday that net profit fell by more than half in the six months ending June 30.

The company reported net profit of 306 million pounds (EUR457 million; US$629 million), down 50.6 percent from 619 million pounds in the same period last year.

Rolls-Royce said its order book grew by 9 billion pounds (EUR13.4 billion; US$18.5 billion) in the first half to 35.1 billion pounds (EUR52.4 billion US$72.2 billion).

Analysts at Fortis Private Investment Management were encouraged by a 17 percent gain in pretax profit and a 10 percent boost in dividend payments, but said the order book figures were the key.

"Rolls booked US$15.1 billion (EUR11 billion) of orders at list prices at last month's Paris Air Show alone, and the order book is now 34 percent higher than it was at year-end," Fortis said in a research note.

"Real orders are probably even higher, since many military orders are only confirmed one year ahead, despite commitment extending over much longer periods."

The company's revenue was up 6 percent to 3.6 billion pounds (EUR5.4 billion; US$7.4 billion).

Underlying pretax profit, a measure which excludes certain financial items and is closely watched by analysts, rose 17 percent to 380 million pounds (EUR567 million US$781 million), above the market consensus of 14 percent.

Rolls-Royce shares were up 0.85 percent to 535 pence (EUR7.99 US$11.00) on the London Stock Exchange.

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