Company - - Aug 03,2018
Rolls-Royce has been struck by a charge worth £554m to compensate costs linked to engine faults for its Trent 1000.
It has been revealed that the engine which was equipped on Boeing's Dreamliner range of aircraft, has developed problems associated to its turbine blades. This issue of engine failure has forced the airlines to stall the aircrafts while Rolls-Royce offers a solution.
The company disclosed that the actual cash cost to fix the problem would range close to £450m this year and in 2019, whereas for 2020 the cost will reduce down to £350m and substantially fall further till the work gets completed by 2022.
Rolls-Royce was also shocked by costs of re-organizing the business and an extended loss associated to the way it interprets for currency moves. However, the company has maintained a strong head and believes if those costs were kept aside, the fundamental business performance was quite decent.
Chief executive Warren East said, "We continued to make good progress in the first half. Financial results were ahead of our expectations, with strong growth from civil aerospace and power systems, and we achieved a number of operational and technological milestones".
Rolls Royce broadcasted 4,600 job cuts in June for the next two years; this act was part of their major reorganization.
These cuts were majorly associated with middle management and back office designations and were likely to impact its base in Derby.