Market Analysis

Britain's Rolls-Royce is optimistic about meeting its 2024 forecasts, driven by the continued growth in air travel, rising demand for power for data centers, and the company's focus on improving efficiencies and contractual agreements.

CEO Tufan Erginbilgic, who took over 18 months ago after serving as a BP executive, aims to transform Rolls-Royce, which manufactures engines for Airbus and Boeing wide-body jets, into a more competitive entity.

On Thursday, the group maintained its guidance for underlying operating profit to range between 1.7 billion pounds and 2 billion pounds this year, an increase of up to 25%.

"We have had a strong start to the year, despite ongoing industry-wide supply chain challenges. This builds on our record performance in 2023 and bolsters our confidence in the 2024 guidance," Erginbilgic stated.

Part of Erginbilgic's strategy has been to strengthen Rolls-Royce's balance sheet, which was significantly impacted during the pandemic when air travel came to a halt.

In its largest division, civil aerospace, Rolls-Royce reported that flying hours, which measure the usage of its engines by airlines, reached 100% of 2019 levels in the first four months of the year and could potentially reach up to 110% by the end of the year.

Additionally, the company noted that it had recently received upgrades from credit rating agencies and had reduced its debt by repaying a 550 million euro bond using its cash reserves.

Paraphrasing text from "Reuters" all rights reserved by the original author.