Rolls Limits Trent Accident Costs, Projects Growth
Rolls-Royce believes it can contain the financial cost of last November’s uncontained disc failure in a Trent 900 engine to not much more than £56 million ($89.6 million). It allocated that amount for dealing with the fallout from the accident on a Qantas A380 airliner in its financial results for 2010, announced on February 10. The UK group indicated that it could still incur “modest” additional costs this year relating to the incident. However, at press time, Qantas had yet to indicate whether or not it will proceed with legal action it initiated in December ahead of a negotiated compensation package.
Overall, the results announced by Rolls-Royce proved positive–as was its forecast for 2011. For the year ending Dec. 31, 2010, group revenues grew by 6 percent over 2009 to reach £11.1 billion ($17.8 billion). Pre-tax profits increased by 4 percent to reach £995 million ($1.6 billion). New orders for civil engines totaled £7.5 billion ($12 billion) last year, out of a group total of £12.3 billion ($19.7 billion).
Rolls-Royce chief executive Sir John Rose, who will retire at the end of March and be replaced by John Rishton, said that the group could achieve a further 25-percent increase in profits this year, despite acknowledged cost hikes for research and development on new engine programs. Anticipated civil air transport growth in the “mid to high” single digits largely account for Rolls’s bright outlook.