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Rolls Royce FY17 Underlying Operating Profit Up 22%; Underlying Revenue Up 6%

Rolls Royce Holdings plc (RYCEF.PK,RR.L,RYCEY.PK) reported 2017 profit before tax of 4.9 billion pounds, a material increase over the 2016 loss of 4.6 billion pounds. The Group noted that its reported profit before tax included a 2.6 billion pounds non-cash profit from the revaluation of its hedge book as sterling strengthened. Profit per share was 228.64 pence compared to a loss of 220.08 pence. Underlying operating profit was 1.2 billion pounds, an increase of 22% from prior year. Underlying profit before tax was up 25% to 1.1 billion pounds with strong contribution from Power Systems. Underlying earnings per share was 40.5 pence compared to 30.1 pence.

Fiscal 2017 underlying Group revenue rose 6% to 15.09 billion pounds, reflecting 6% growth in original equipment and 7% in services. Civil Aerospace led the progress, with revenues up 12% reflecting strong growth in OE engine delivery volumes (up 5% in total and up 35% for widebody). Nuclear revenues rose 4%.

Warren East, Chief Executive, said: "Financial results were ahead of our expectations and we achieved a number of important operational and technological milestones, but were impacted by the increasing cost and challenge of managing significant in-service engine issues. The business unit simplification and restructuring programme that we announced this January will drive further rationalisation and is a fundamental step in the journey started two years ago to bring Rolls-Royce closer to its full potential both operationally and financially."

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