LONDON (dpa-AFX) - Shares of Rolls Royce Holdings plc (RYCEF.PK, RR.L, RYCEY.PK) declined around 6 percent in London trading after the aero engine maker reported a hefty loss in its fiscal 2016, compared to last year's profit, on charges. Revenues , however, increased from last year, and the company projects marginally higher revenues in fiscal 2017.
For the year 2016, the company's loss before tax was 4.64 billion pounds, compared to profit of 160 million pounds in the previous year. Loss to ordinary shareholders was 4.0 billion pounds or 220.08 pence per share, compared to profit of 83 million pounds or 4.48 pence per share last year.
The latest results reflected a non-cash impact of 4.4 billion pounds period-end mark-to-market revaluation of derivatives and a 671 million pounds charge for financial penalties from agreements with investigating bodies.
Underlying profit before tax was 813 million pounds, compared to 1.43 billion pounds a year ago. Underlying earnings per share were 30.13 pence, compared to 58.7 pence last year.
Underlying profit before finance charges and tax was 45 percent lower at 915 million pounds. All segments posted weak results. Civil Aerospace' underlying profit fell 60 percent and Defence Aerospace's profit was down 8 percent.
Fiscal- year reported revenue increased 9 percent to 14.96 billion pounds from 13.73 billion pounds in the previous year. Underlying revenue was down 2 percent at constant exchange rates, reflecting weakness in Marine.
Order book increased to 79.81 billion pounds from last year's 76.40 billion pounds.
Warren East, Chief Executive, said, 'We have made operational progress and performed ahead of our expectations for the year as a whole. While we have made good progress in our cost cutting and efficiency programmes, more needs to be done to ensure we drive sustainable margin improvements within the business.'
Further, the company said its final payment to shareholders is maintained at 7.1 pence per share, giving a full year dividend of 11.7 pence, higher than last year's 16.4 pence. The distribution will be in the form of C Shares.
Looking ahead, for fiscal 2017, the company said group revenue on a constant currency basis should be marginally higher than that achieved in 2016, despite expected further weakening in offshore oil and gas markets in Marine.
Rolls Royce said the year-on-year incremental progress will be modest, after a better than expected 2016. The company said its medium-term trajectory for revenue, profit and free cash flow remains unchanged.
In London, Rolls Royce shares were trading at 697.12 pounds, down 5.79 percent.
Copyright RTT News/dpa-AFX