Portugal Colonial - Rolls-Royce confident on profits despite Mideast war disruption

Rolls-Royce supplies engines to the world's biggest aircraft manufacturers Airbus and Boeing, leaving it exposed to severe air travel disruptions in the wake of US-Israeli attacks on Iran on February 28.

"The conflict in the Middle East has created uncertainty for the industry," chief executive Tufan Erginbilgic said in a trading update ahead of the group annual general meeting on Thursday.

He added, however, that "we expect to fully mitigate the current financial impact of the disruption to our business."

Erginbilgic praised the "strong start to the year" across its aerospace, defence and power systems divisions.

The group maintained its 2026 targets for an underlying annual operating profit of between £4 billion ($5.4 billion) and £4.2 billion.

"We remain strongly positioned to deliver our mid-term targets, with substantial growth beyond the mid-term from both our existing and new businesses," Erginbilgic said.

Rolls-Royce has undergone a major turnaround since Erginbilgic took the helm in 2023 leading to repeated upgrades to its outlook.

Net profit more than doubled last year to £5.8 billion, buoyed by strong aircraft engine performance and a favourable currency effect linked to a weaker dollar.

Rolls-Royce had benefited also from cost savings, while the group is set to profit further from government spending on defence.

V.Fontes--PC