London: British engine maker Rolls Royce Group Plc posted better-than-expected full-year results and said it sees 2009 underlying profit broadly similar to last year, although it was too early to predict the full impact of the economic crisis.
The company, best known for manufacturing plane engines has said in a statement that the current year would be difficult for the economy but that the diversity of its business and strength of the balance sheet would see it develop the business in the longer term.
“The current economic crisis will have an impact on the group, its customers and suppliers, but it is too early to be precise about the scale and duration of these effects,” it said.
Chief Executive John Rose said that he expected demand to slip in the civil sector, but that defence would remain strong.
“There is evidence of reducing demand. We expect civil profit to be down a little, but for marine and defence to grow strongly,” he said, adding that the nuclear power industry would help sustain the business over the next decade.
Rolls Royce shares, which are down 20% in the past year, fell 1% to 312.5 pence, valuing the firm at £5.7 billion.
Rolls reported a 2008 pretax profit of £880 million ($1.27 billion), 10% higher than the previous year and slightly ahead of analysts’ forecasts.
Analysts were expecting pretax profit before exceptional items to come in at £872 million, up from £800 million last year.
Rolls said that its order book had increased by 21% to £55.5 billion, while its net cash position was £1.45 billion, up from £888 million at the end of 2007.
John Rose said that the group would continue to grow its average net cash position this year, partly as insurance against the current climate.
“It’s the sensible thing to have a strong balance sheet,” he said.
Rolls increased the full-year dividend to 14.3 pence a share, up 10% in 2007.
Rolls is co-leader of the engine building consortium for the much delayed A400M military aircraft, which is being assembled by EADS and has been ordered by seven nations including Britain.
The company blamed project delays for the announcement last year that it would cut 1,500-2,000 jobs worldwide, including 140 in the UK.
It has also suffered from delays to the Airbus A380 plane and the Boeing 787, also known as Dreamliner.