Rolls-Royce swings to £2.9bn loss

Engineering giant Rolls-Royce swung into loss last year, as it increased the charge for fixing problems with its Trent 1000 engines.

The company also took a charge of £186m after Airbus said it was stopping production of its A380 superjumbo aircraft.

Rolls-Royce reported a pre-tax loss of £2.9bn for 2018, down from a profit of £3.89bn the previous year.

The firm also withdrew a bid to supply an engine for a new Boeing plane.

The company’s shares were the biggest fallers on the FTSE 100 – down more than 4% at one point.

Underlying operating profit, which strips out the exceptional items, jumped 71% to £633m, up from £317m in 2017.

“Underlying financial results are ahead of expectations, with good growth in profit and cash flow. Following the restructuring we announced in June last year we are starting to see the crucial behavioural changes needed to sustain our momentum,” chief executive Warren East said.

The company announced last summer that it was cutting 4,600 jobs over two years as part of a major reorganisation.

Last year, a fault with Rolls-Royce’s Trent 1000 engines grounded planes at British Airways and other airlines. The engine powers Boeing’s 787 Dreamliner.

At the time, the company said the issues would take “some years” to fix. It said parts in its Trent 1000 engines were wearing out faster than expected but that it “had a solution” to the problem.