Rolls-Royce's £238 million (US$286 million) 2022 profit increase was part-driven by "strong new order wins" in civil aerospace, the UK manufacturer reported on February 23.
Defence and "a record order book in power systems" also contributed to what Rolls-Royce reported as an underlying operating profit of £652 million, with "new large engine orders" from Malaysia Aviation Group, Norse Atlantic Airways and Qantas listed.
The company's net debt fell by £1.9bn to £3.3bn after "improved cash flow", which was £2bn higher than in 2021 and was "led by engine flying hour recovery".
"Free cash flow benefitted from higher civil aerospace LTSA invoiced flying hour receipts of £3.56bn, up from 2021's £2.29bn", the manufacturer said, mentioning "the collection of overdue balances in civil aerospace" and "a customer advance in defence and power systems".
The company said it had £4.1bn of drawn debt, of which £0.5bn matures in 2024, £0.8bn in 2025 and £2.8bn in 2026-2028, and £1.8bn of lease liabilities, leaving it with have £2.6bn cash and £5.5bn undrawn facilities.
Shareholder payments will not be made for 2022, however. "We are committed to returning to an investment grade credit rating through performance improvement, and to resuming shareholder payments," the company explained.
"While our performance improved in 2022, we are capable of much more. Our transformation programme will improve our efficiency and commercial outcomes, and deliver a sustainable reduction in working capital," said chief executive Tufan Erginbilgic.
The outlook for 2023 is profit guidance of up to £1bn and cash flow of up to £800 million. Rolls-Royce in early 2023 won a major engine order as part of Air India's record order of up to 470 Airbus and Boeing aircraft.
