LONDON (dpa-AFX) - Rolls-Royce Holdings plc (RYCEF.PK, RR.L, RYCEY.PK) reconfirmed its financial guidance for 2018 profit and free cash flow. Specifically, the company expects both group and core profit and cash flow for 2018 to be in the upper half of its full year guidance range.
For its core business, Rolls-Royce said in August that it expects 2018 underlying operating profit of around 450 million pounds, plus or minus 100 million pounds, and underlying free cash flow of around 400 million pounds, plus or minus 100 million pounds.
In Civil Aerospace, the company said today it still expects full year growth to be in the mid-teens range.
In Power Systems, the strong growth seen in the first half of 2018 has continued through the second half, driven by good growth in almost all end markets, the company said.
The company said, 'Defence trading progress has remained in line with our full year guidance, with revenues expected to remain stable.'
ITP Aero continues to trade in line with expectations.
The company noted that the restructuring it announced on 14 June 2018 remains on track. The focus in 2018 has been on establishing its new operating model and on delivering the targets previously communicated; specifically, a 4,600 headcount reduction over the next two years, with around a third of these taking place before the end of this year.
The disposal process of the Commercial Marine business is proceeding to plan and completion is expected towards the end of the first-quarter of 2019. It expects net proceeds of around 350 million pounds to 400 million pounds dependent upon the final outturn working capital on completion.
Rolls-Royce noted the decision by the UK Government to delay the vote on the proposed Withdrawal Agreement and political declaration. The company will continue to implement its contingency plans until it is certain that a deal and transition period has been agreed.
'Specifically, we are working with EASA to transfer design approval for large aero engines to Germany, where we already carry out this process for business jets. This is a precautionary and reversible technical action which we do not anticipate will lead to the transfer of any jobs,' Rolls-Royce said.
The company noted that its 2018 Full Year results will be announced on 28 February 2019.
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