Rolls-Royce reports record loss of £4.6bn

A bribery settlement and the fall in the pound have pushed engineering giant Rolls-Royce to a record loss.

The jet engine maker reported a loss before tax of £4.6bn for 2016.

Earlier this year, the company agreed to pay £671m to settle corruption cases with UK and US authorities.

As most aerospace deals are done in dollars it was hit hard by the post-Brexit vote slump in the pound, and it has written off £4.4bn from currency related contracts.

Underlying profits, which strip out one-off costs, fell to £813m, down from £1.4bn the previous year, although the fall was much less than many analysts had forecast.
Advertisement

The company said the outlook for this year was for a "modest performance improvement", while chief executive Warren East said more needed to be done to improve profit margins. It is in the process of carrying out a major cost-cutting drive.

"We must ensure our wide ranging business transformation programme delivers the full benefits expected, not only in terms of cost savings but also the cultural and behavioural changes necessary to ensure the transformation is sustained and high standards of business conduct are maintained," said Mr East.

"These are essential if we are to become a more trusted, resilient company."

Rolls-Royce has apologised "unreservedly" for the corruption cases, which spanned 25 years, and involved illegally using local middlemen and paying bribes to win deals in Indonesia, Thailand, China and Russia.

http://www.bbc.com/news/business-38966165?ocid=socialflow_facebook&ns_mchannel=social&ns_campaign=bbcnews&ns_source=facebook