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Rolls-Royce Holdings PLC said on Thursday that it is on track to meet its 2024 guidance, despite ongoing supply chain challenges in the aerospace industry. Rolls-Royce shares fell 4.4% to 548.82 pence on Thursday morning in London. The London-based manufacturer, which supplies aero-engines to the aerospace and defence sectors, reaffirmed its expectations for an underlying operating profit in the range of £2.1 billion to £2.3 billion for the year. It would represent an increase of up to 45% from £1.59 billion in 2023. In the Civil Aerospace division, demand remains strong, with large engine flying hours up 18% year-on-year for the 10 months to October 31. The company expects large engine flying hours for 2024 to be between 100% and 110% of 2019’s pre-pandemic level. Rolls-Royce also maintained its forecast for free cash flow in the range of £2.1 billion to £2.2 billion for 2024, a rise of up to 71% from £1.29 billion in 2023. In Defence, Rolls-Royce reported robust demand, with significant progress made across key platforms. While acknowledging the ongoing supply chain difficulties in the aerospace industry, Rolls-Royce said it continues to focus its efforts on working with 15 key suppliers to mitigate disruptions. Rolls-Royce is set to announce its full-year results for 2024 on February 27. The company confirmed its plans to reinstate shareholder distributions, targeting a payout of 30% of underlying pretax profit for 2024, with a target payout ratio of 30% to 40% thereafter. The last time Rolls-Royce paid a dividend was in January 2020, before the pandemic took hold. ‘Our transformation of Rolls-Royce into a high-performing, competitive, resilient and growing business continues with pace and intensity. Continued good performance year to date gives us further confidence in the delivery of our 2024 guidance despite a supply chain environment which remains challenging. We are also making good progress towards our mid-term targets, with a front-end loaded delivery of profit and cash flow improvements. There is more we still need and want to do, as we expand the earnings and cash potential of Rolls-Royce,’ Chief Executive Tufan Erginbilgic said. Copyright 2024 Alliance News Ltd. All Rights reserved.
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