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Rolls-Royce's profits dive


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Rolls-Royce's profits dive

British aircraft engine maker Rolls-Royce’s profits have taken a dive.

It suffered a record annual loss of 4.6 billion pounds (5.4 billion euros).

That included 671 million pounds (788 million euros) being paid to settle bribery investigations in Britain, the United States and Brazil.

The collapse of the value of the pound after the Brexit vote also cost it dear. There was a 4.4 billion pound (5.2 billion euros) non-cash charge on its currency hedges. Most aircraft deals are priced in dollars, forcing Rolls-Royce to hedge its future income against the possibility of major currency swings.

Rolls-Royce, which was already reshaping its business after a series of profit warnings, said it needs to cut more costs and could sell some of its weaker divisions.

Chief Executive Warren East said the business portfolio was “broadly correct”, but he needed to review 20 percent of its operations, and would decide on further actions in the coming months.

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