Rolls-Royce’s underlying operating profits surged to £1.59bn (circa $2bn) in the full year 2023, more than doubling its 2022 full year result of £652 million ($823.39 million). Following the result, the company guidance predicted an underlying operating profit between £1.7bn and £2bn ($2.1bn and $2.5bn) for the year ahead.
Revenue was at £15.4bn ($19.4bn), up from £12.7bn ($16bn) in 2022. The company reported a return on capital more than doubling to 11.3% “reflecting improved operating profit, disciplined capital allocation and working capital management.”
“Our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives,” said Rolls-Royce CEO Tufan Erginbilgic.
Net debt was reduced from £3.3bn ($4.16bn) at the end of 2022 to £2bn ($2.52bn) at the end of 2023.
Begbies Traynor partner Julie Palmer said: “It is positive to see how net debt has been whittled down… but the real story is that this has been aided by burgeoning earnings. Rolls-Royce’s largest division, Civil Aerospace, is providing some real momentum, with engine orders at the highest level in 15 years”.
He added: “We are managing the business differently… Our strong delivery in 2023 gives us confidence in our 2024 guidance and is a significant step towards our mid-term targets.”
In an earnings presentation, Erginbilgic said the company was building momentum and track record for its deliveries. He added: ""In Civil Aerospace, we are investing £1 billion ($1.28bn) in time on wing improvements. This is a multiyear investment.""
The company shares climbed around 8-9% in early trading following the results.
Rolls Royce profit surges to $2bn in FY23
