Rolls-Royce Reports GBP£4.03 Billion Loss

Aero engine maker Rolls-Royce reported a net loss of GBP£4.03 billion (USD$5.02 billion) for 2016 as it suffered from a post Brexit vote currency fall and the settlement of bribery allegations.

The pre-tax loss was £4.6 billion, with underlying profit of £813 million, down from 2015’s £1.43 billion, both pre-tax.

In January Rolls reached agreements with the UK, US and Brazil over bribery investigations. Total cost of the payments to the three countries was £671 million, spread over a number of years.

The post-Brexit drop in the pound led to a £4.4 billion hedging charge for the year. Rolls said its US dollar hedge book increased by 31 percent during the year to $37.8 billion, or over 5 years of net exposure.

The company reported revenue for 2016 of £14.96 billion, up 9 percent from £13.72 billion the previous year.

“2016 has been an important year as we accelerated the transformation of Rolls-Royce,” chief executive Warren East said. “While we have made good progress in our cost cutting and efficiency programmes, more needs to be done to ensure we drive sustainable margin improvements within the business.”

Rolls-Royce makes aero-engines for wide-body aircraft including the Airbus A330, A350 and A380, plus the Boeing 777 and 787.