Supply Chain Woes, Inflation Hit Rolls-Royce Profits In H1

The British engine maker estimates widebody flying hours are still below pre-COVID levels by 40%.
Credit: Rolls-Royce

British engine manufacturer Rolls-Royce has posted a half-year pre-tax loss of £111 million ($134.9 million) which it attributed to challenges including the strained global aviation supply chain and rising cost inflation. 

In results released on Thursday (Aug. 4), the Derby-headquartered company reported an underlying operating profit of £125 million for the first six months of this year, a reduction of £307 million compared to the same period last year.

Underlying revenues for the six months to Jun. 30, 2022 stand at £5.3 billion, slightly higher than the £5.2 billion posted in H1 2021. 

Rolls-Royce stated that compared to before the pandemic, widebody engine flying hours remain down by 40%, which has led to reduced demand in engine overhaul activity.

Aftermarket services, which contribute to more than 50% of the company's overall revenues, increased by 22% in the first half of 2022 for widebody aircraft and 6% for overall shop visits.

The company noted challenges across the business related to strained global supply chain and cost inflation, which it is actively looking to navigate through a sharper focus on pricing, productivity, and costs.    

Despite these challenges, the engine giant noted an upturn in widebody engine demand and says it expects “low- to mid-single-digit revenue growth” in 2022.

Rolls-Royce says this expectation is based on improvements in civil aerospace performance driven by higher large engine sales and increases in engine shop visits.

James Pozzi

As Aviation Week's MRO Editor EMEA, James Pozzi covers the latest industry news from the European region and beyond. He also writes in-depth features on the commercial aftermarket for Inside MRO.