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(Sharecast News) - Aerospace and defence company Rolls-Royce posted a better than expected rise rise in operating profit as the post-pandemic recovery in international travel continued, sending shares in the company up 19%.
The company on Thursday posted a statutory operating profit of £837m in 2022, up from £513m a year earlier. Revenue grew to £13.5bn from £11.2bn.
On an underlying basis, operating profit was up to £652m from £414m and better than the £489m expected by analysts. The company added that it expected underlying earnings of £0.8-1bn this fiscal year
Rolls-Royce, which gets paid when its engines on aircraft are flying and also being serviced, said large engine flying hours in civil aerospace grew by 35% year on year as recovery in international travel continued. Order intake in Power Systems grew 29% to £4.3bn.
"In 2023, we assume large engine flying hours at 80-90% of 2019's level and 1,200-1,300 total shop visits," the company said.
Rolls said it was going to set new financial targets in the second half of the current year as it starts a strategic review of the business, but offered little detail.
"Our transformation programme is already under way and is moving at pace. It will include a strategic review so that we can prioritise our investment towards the most profitable opportunities," said chief executive Tufan Erginbilgic.
He added: "While our performance improved in 2022, we are capable of much more. Our transformation programme will improve our efficiency and commercial outcomes, and deliver a sustainable reduction in working capital."
Reporting by Frank Prenesti for Sharecast.com
