Rolls-Royce profit slumps as it battles inflation

STORY: Rolls-Royce disappointed investors Thursday (August 4) with a big tumble in profits.

They sank to about $152 million - or less than half the figure this time last year.

That was way below analyst expectations.

Its civil aviation business actually reported a loss, despite a sharp upturn in flying hours by the world’s airliners.

That would normally drive revenues higher, as many carriers pay Rolls according to how much its engines operate.

However, the UK firm is facing challenges from rising inflation and supply-chain disruption.

It’s been hit by chip shortages, and has had to seek new suppliers of titanium.

Chief Executive Warren East sees signs of improvement though.

He says cash flow should turn positive for the year.

That would be an improvement from the previous two years, when Rolls burned through billions of dollars.

Shares in the company were down around 10% by lunchtime following the disappointing earnings numbers.

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