Defence sector boosts Rolls-Royce as Asia recovery lags under Covid-19
Aerospace giant Rolls-Royce’s recovery continues to lag in Asia due to ongoing Covid-19 measures, as the firm makes headway again in the US and Europe.
The London-listed company, which builds jet engines, has been particularly vulnerable to supply chain disruptions and inflation, as it continues to restore back to full health following the pandemic.
Rolls-Royce, however, has been given a boost by the recent demand in defence capabilities, amid the war in Europe. The company has secured $1.8bn (£1.5bn) in aftermarket services as part of two five-year defence contracts this year.
“The continued recovery in large engine flying hours, record order intake in Power Systems and a resilience in the Defence business give us confidence in the future,” chief executive Warren East said.
“Disciplined capital allocation will continue to be pivotal in our new markets ventures as we invest in the technologies of the future. The completion of our disposal programme with the sale of ITP Aero has enabled us to repay £2bn of debt.
“This marks a milestone recovery in the strength of our balance sheet, and a clear step on our path back to investment grade in the medium term.”
The £2bn sale of ITP Aero has also allowed the company to shave off some of its debts.