Rolls-Royce profits soar on fuel-saving engine demand
LONDON (Reuters) - Britain's Rolls-Royce (RR.L) reported a 24 percent rise in full-year profit, led by strong growth at its civil aerospace unit, and said it did not expect the grounding of Boeing's (BA.N) Dreamliner jet to dent profits.
Rolls, which makes the Trent 1000 engines that power some Dreamliners, on Thursday said last month's worldwide grounding of the 50 jets in commercial service would not hit its profits.
"Boeing continues production so no, it won't impact us, and I'm confident Boeing will sort the problems out soon," chief executive John Rishton told reporters. "For the full year 2013, we expect the group to see good growth in underlying profit."
Rolls, the world's second-largest maker of aircraft engines behind U.S. group General Electric (GE.N), also said chairman Simon Robertson would retire after eight years in the job and be replaced by BP (BP.L) non-executive director Ian Davis after the company's annual general meeting in May.
Davis, a former chairman at management consultancy firm McKinsey, joins Rolls-Royce at a time when corruption allegations cast a shadow over the company.
Late last year Rolls said it could face prosecution after Britain's Serious Fraud Office ordered it to conduct an internal inquiry into possible bribery and corruption by intermediaries in China, Indonesia and other overseas markets.
"Ian has experience under a raft of different circumstances," said Rishton, who highlighted Davis' experience in dealing with "challenging situations" such as the 2010 BP oil spill in the Gulf of Mexico.
Rolls said lawyer David Gold, hired to lead a review of its compliance procedures after the allegations emerged, had started his review last week but that it had nothing more to say about the alleged corruption.
The aerospace group posted a record underlying pretax profit of 1.43 billion pounds ($2.18 billion) for 2012, ahead of an average forecast of 1.37 billion pounds, according to a Thomson Reuters I/B/E/S poll of 14 analysts.
The result was Rolls' tenth straight year of profit growth.
Rolls, a major British exporter which dates back to 1884, said revenues rose 8 percent to 12.2 billion pounds, boosted by a strong performance at Tognum TGMG.DE, its marine and industrial engine joint venture with Daimler (DAIGn.DE).
Revenues at its civil aerospace business, which accounts for around half of group sales, rose 16 percent, helped by soaring demand for more fuel-efficient engines for planes made by Europe's Airbus EAD.PA and U.S. rival Boeing (BA.N).
Global airlines will buy $3.5 trillion of aircraft over the next 20 years to meet demand for travel to and from emerging markets - especially in Asia - and renew ageing fleets in the West, according to the world's big two planemakers.
"The 2012 result is just fine ... so too, we believe, is all of the guidance for 2013 other than that for cash flow, guided to be around breakeven. That may prove a bone of contention in the short-term," said Jefferies analyst Sandy Morris.
Shares in the group, which have risen 12 percent this year, were 1 percent down at 974.5 pence by 0915 GMT, valuing the group at around 18 billion pounds.
The company, whose website says a Rolls-Royce powered aircraft takes off or lands every 2.5 seconds, increased the interim dividend by 11 percent to 19.5 pence per share. Its order book rose 4 percent to 60.1 billion pounds.
(Editing by Kate Holton and Helen Massy-Beresford)