Rolls-Royce earnings hit record highs under boss Tufan Erginbilgic

  • The company raised £7.7bn in the first six months of the year, according to City forecasts
  • Aircraft engine maker benefits from post-Covid surge in international flights

Turnaround: Rolls-Royce boss Tufan Erginbilgic has boosted sales figures

Rolls-Royce’s revenues are expected to hit record highs, giving fresh impetus to CEO Tufan Erginbilgic’s ambitious turnaround plan.

The FTSE 100 aircraft engine maker earned £7.7bn in the first six months of the year, according to City forecasts.

The 11 percent increase in revenue was due to the number of international flights returning to pre-Covid-19 levels.

Rolls builds aircraft engines, but makes its money from maintaining them. The number of flying hours is therefore crucial to the company’s success.

The company has also secured a number of new contracts, including with Indian airline IndiGo, which ordered 60 engines, and with VietJet.

Demand for power generators from data centers and artificial intelligence suppliers has also increased significantly.

This is expected to be a growth area for Rolls.

The company can also benefit from demand for mini-nuclear power plants, also known as small modular reactors (SMRs).

Rolls has spent years designing a model based on the technology it uses to power nuclear submarines. It is one of a number of companies being considered by the government to build a fleet of SMRs for Britain, and its designs are being considered by several other European countries.

Erginbilgic has implemented a strict cost-cutting programme, expected to reduce spending by £200m a year by the end of 2025, and has paid down some of Rolls’ significant debt.

Erginbilgic joined in early 2023, when the company was still struggling to recover from the pandemic. Rolls was making huge losses as aircraft were grounded.

But the company had been underperforming for years and was already in the midst of an overhaul when Covid hit.

When Erginbilgic took over, he was quick to describe Rolls as a “burning platform”. However, his plans have been supported by the market and the shares have risen 375 per cent since he took over 19 months ago.

This year alone, they’ve increased by almost 50 percent.

A surge in defence spending following the war in Ukraine, which began in 2022, has also contributed to the rise in Rolls’ share price.

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