Rolls-Royce announces return to profitability in 2023

London (awp/afp) – British industrial group Rolls-Royce, specialized in aircraft engines, announced on Thursday that it has returned to profitability in 2023, posting a positive result of 2.4 billion pounds (2.7 billion Swiss francs) compared to a loss . 1.3 billion the previous year.

The reform plan led by the group “provided a record performance in 2023”, and this “despite the volatile environment set by geopolitical uncertainty, challenges at the chain level “supply constraints and pressures linked to inflation”, said the Director General Tufan Erginbilgic in the press release.

The group’s shares rose 8.62% in London to 357.90 cents by 08:50 GMT on Thursday on the London Stock Exchange. Over a year, the value of the stock on the stock market has more than tripled, after the decline of recent years (over five years, the stock shows a more modest increase of 6.3%).

“Rolls-Royce’s strong performance in 2023 has taken the company from trouble to become the biggest winner in the FTSE 100, marking a major turnaround,” commented Natalya Davies, investment research and advisory analyst at Edison Group.

Rolls-Royce saw its sales rise by almost 22% last year to £16.5 billion, and is also focusing on “cash flow generation” over the period.

The industrial group announced in October that it would cut up to 2,500 jobs worldwide, or up to 6% of its global workforce, to cut costs, as part of a rescue plan by its new boss.

The group had already reduced its workforce by cutting 9,000 jobs during the pandemic, while the aviation industry was crippled.

Driven by the resumption of aviation, Rolls-Royce returned to profit in 2021 after heavy losses the previous year, then the group pulled back sharply in 2022, weighed down in particular by large accounting charges linked to foreign currency contracts.

Mr. Erginbilgic, a former BP executive who takes over at Rolls-Royce at the start of 2023, detailed an ambitious turnaround plan last year, which aimed to prioritize investment in “more profitable opportunities”.

In addition to aircraft engines, the group is also developing new business segments, such as its plan to build small nuclear reactors in the UK.

afp/al