Rolls-Royce on track as new CEO finds savings

British engine maker Rolls-Royce (RR.L) said it performed as expected in the first part of the year, with flying hours recovering, and steps taken by its new CEO to find savings putting it on track to meet 2023 targets.

Tufan Erginbilgic, who took over as boss in January, has said Rolls is a “burning platform” which needs to improve its cash generation, cut debt and invest for the future.

A strategic review he initiated is due to report in the second half of 2023, he confirmed on Thursday.

“We are encouraged by the early progress of our commercial optimisation and working capital workstreams, with positive results expected to build as the year goes on,” Rolls-Royce said.

The company highlighted a new order win for its civil aerospace unit, which provides engines for Airbus A350 and Boeing 787 planes, and said it was seeing improved pricing in its power systems business.

That helps put it on track to meet guidance for operating profit of between 800 million pounds and 1 billion pounds for 2023 and free cash flow of between 600 million pounds and 800 million pounds, it said.

In its civil aerospace unit, the biggest part of the business, Rolls-Royce said flying hours reached 83 per cent of pre-pandemic levels in the four months to April 30.

Shares in Rolls-Royce have risen 60 per cent in the last six months, making it the top performer on Britain’s bluechip index (.FTSE) over the period.