Profits at Rolls-Royce more than doubled last year, significantly beating expectations, as the aero-engine manufacturer's sales soared.
Underlying operating profit for 2023 was £1.6 billion ($2 billion), exceeding analyst forecasts of £1.4 billion, its own estimate of £1.2 billion to £1.4 billion pounds and the £652 million of the previous year.
Analysts said the outlook for the company was “positive”.
Rising profits are also forecast for 2024 as aircraft powered by Rolls-Royce engines fly more, the company's power business improves and defence orders continue to flow.
Rolls-Royce predicts its underlying operating profit will rise by at least 6 per cent this year, from £1.7 billion and £2 billion, compared to the current consensus forecast fixed at £1.7 billion.
A Shore Capital note said: “While we will assess the viability of these numbers in due course, our numbers currently sit at or below the bottom end of the range, which should provide scope for upgrades. In addition, the strong results and robust outlook should pave the way for a dividend in FY24F.
“Overall, it appears the group is making quicker-than-expected progress towards their mid-term objectives announced at the Capital Markets.”
Rolls-Royce has delivered strong growth under Tufan Erginbilgic, the former BP executive who became chief executive a year ago.
“Our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives,” said Mr Erginbilgic in a statement on Thursday.
“This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply-chain challenges and inflationary pressures.
“We are managing the business differently and our significant performance improvement in the year reflects the hard work and focused actions of all our teams.
“We are also continuing to invest to drive future sustainable growth. Our strong delivery in 2023 gives us confidence in our 2024 guidance and is a significant step towards our mid-term targets.
"We are unlocking our full potential as a high-performing, competitive, resilient and growing Rolls-Royce.”
