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Rolls-Royce expects 2018 profit, free cash flow in upper half of forecast range

Rolls-Royce expects 2018 profit, free cash flow in upper half of forecast range
FILE PHOTO: A Rolls-Royce engine of an Airbus A350-900 of Ethiopian Airlines is photographed during a site-inspection at Fraport airport in Frankfurt, Germany, May 22, 2017. REUTERS/Kai Pfaffenbach   -   Copyright  KAI PFAFFENBACH(Reuters)
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LONDON (Reuters) – Rolls-Royce <RR.L> expects its 2018 group profit and free cash flow to be in the upper half of its guidance range, the British engineering company said on Wednesday, shrugging off problems with some of its aircraft engines.

Rolls, whose main business makes engines for large airliners, had forecast group operating profit of 400 million pounds, give or take 100 million pounds, and free cash flow of 450 million, give or take 100 million pounds.

It said it now expects its results to hit the upper half of those ranges after airlines flew their planes for more hours, helping Rolls earn more from maintenance and related activities.

The positive guidance comes despite problems with its Trent 1000 engine which has meant airlines have had to ground some of their Boeing <BA.N> 787 Dreamliner planes, and after slightly lower-than-expected deliveries of some other engines.

Rolls said that it was readying itself for Britain’s exit from the European Union by building up inventory amongst other contingency plans.

“We will continue to implement our contingency plans until we are certain that a deal and transition period has been agreed,” Rolls said in a statement.

The company also said its restructuring plan which will see it shed 4,600 jobs over two years was on track.

(Reporting by Sarah Young; editing by Paul Sandle and Jason Neely)

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