Rolls-Royce forecasts GBP550m decline in civil aerospace business profit for 2016

Rolls-Royce reported (28-Jul-2016) the following outlook for its Civil Aerospace business for 2016:

• Company continues to expect its Civil Aerospace business to underperform 2015 underlying profit before finance and tax by around GBP550 million, excluding foreign exchange benefits. The "significant headwind" related to Trent 700 volume reductions and the non-recurrence of a number of one-off benefits seen in 2016 remains broadly unchanged;
• For 2H2016, Rolls-Royce expects the business to benefit from higher large engine deliveries for widebody aircraft, including spare engines to support the growth in our fleets, further life-cycle cost improvements within the company's 'TotalCare' contracts and the benefits from restructuring activity;
• Rolls-Royce remains cautious about the weak business jet markets;
• Rolls-Royce expects the TotalCare net asset to peak in the next12 to 18 months at between GBP2.5 and GBP2.7 billion, reflecting benefits of the changes to its long-term US dollar planning rate, further targeted life cycle cost improvements and other timing differences between cost and cash. [more - original PR]