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Updated February 22nd, 2024 at 14:22 IST

Rolls-Royce reports record profit surge in 2023, forecasts continued growth for 2024

Rolls-Royce's stellar financial performance in 2023 has been met with investor enthusiasm, with shares surging over 200% over the course of the year.

Reported by: Business Desk
Rolls-Royce annual earnings
Rolls-Royce annual earnings | Image:Rolls-Royce
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Rolls-Royce annual earnings: Rolls-Royce has announced a remarkable surge in annual profit for the year 2023, more than doubling its earnings from the previous year, surpassing analysts' estimates. The company, which powers ships, submarines, and commercial aircraft, has provided an optimistic outlook for 2024, projecting further growth driven by increased usage of aircraft powered by its engines, continued flow of defence orders, and rising demand for data centres.

Underlying operating profit for 2023 stood at 1.6 billion pounds, significantly exceeding analysts' expectations of 1.4 billion pounds and Rolls-Royce's guidance of 1.2-1.4 billion pounds. This impressive performance marks a substantial improvement compared to the 652 million pounds recorded in 2022.

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Tufan Erginbilgic, the former BP executive who assumed the role of CEO a year ago, expressed confidence in the company's trajectory, stating, "We are unlocking our full potential as a high-performing, competitive, resilient, and growing Rolls-Royce."

The notable increase in profits can be attributed in part to cost-saving measures implemented by Erginbilgic, coupled with a strategic pricing approach aimed at elevating the engineering giant into a higher-margin business.

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Rolls-Royce's stellar financial performance in 2023 has been met with investor enthusiasm, with shares surging over 200 per cent over the course of the year. This significant growth trajectory has positioned Rolls-Royce as the top performer in Britain's blue-chip index. Notable milestones contributing to this success include a profit upgrade in July and an announcement in November outlining plans to quadruple profit by 2027.

Looking ahead, Rolls-Royce anticipates continued momentum, forecasting a minimum 6 per cent increase in underlying operating profit for 2024. The company projects a range between 1.7 billion pounds and 2 billion pounds, surpassing the current consensus forecast of 1.7 billion pounds.

(With Reuters inputs.)

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Published February 22nd, 2024 at 14:22 IST

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