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Rolls-Royce has confirmed the largest headline loss in its history, as a weak pound which affected its hedge book and a £671m settlement for historic corruption claims drove it to a pre-tax loss of £4.6bn.
The loss was largely down to accounting charges linked to the slump in the pound, which affected the value of financial hedging products at the FTSE 100 giant.
However, the drop in profit did not affect the company’s dividend, and underlying profits before tax declined by much less than earlier analyst forecasts, down by 49 per cent to £813m, compared to expectations of £687m. Shares were 3% lower in early trading.
The Derby-based group, which employs about half of its 50,000-strong workforce in the UK, has been axing thousands of jobs over the last couple of years as part of a cost-cutting overhaul.
Chief executive Warren East said: “2016 has been an important year as we accelerated the transformation of Rolls-Royce.”
Mr East said: “2017 remains a challenging year and we have lots of operational improvements to do.
“We have to look after the short term or there won't be a long term.”
The loss was largely down to accounting charges linked to the slump in the pound, which affected the value of financial hedging products at the FTSE 100 giant.
However, the drop in profit did not affect the company’s dividend, and underlying profits before tax declined by much less than earlier analyst forecasts, down by 49 per cent to £813m, compared to expectations of £687m. Shares were 3% lower in early trading.
The Derby-based group, which employs about half of its 50,000-strong workforce in the UK, has been axing thousands of jobs over the last couple of years as part of a cost-cutting overhaul.
Chief executive Warren East said: “2016 has been an important year as we accelerated the transformation of Rolls-Royce.”
Mr East said: “2017 remains a challenging year and we have lots of operational improvements to do.
“We have to look after the short term or there won't be a long term.”
