British aircraft engine-maker Rolls-Royce edged back into profit in the first half of the year and said it was on track to achieve its forecasts for 2021 as its cost-cutting and disposal plans helped it to survive the Covid-hit to long-haul travel.
The company posted a pre-tax profit of £307 million ($427.4 million) for the first half of 2021, reversing the £1.63 billion loss over the same period in 2020.
Meanwhile, the group's underlying revenue from ongoing operations dipped 2 per cent to £5.2bn as the company continued to haemorrhage cash, with £1.51bn flowing out during the six-month period, although this is little more than half the £2.86bn recorded a year ago.
“The benefits of our fundamental restructuring programme in civil aerospace are evident in our reduced cash outflow and improved operational efficiency,” Rolls-Royce chief executive Warren East said.
“This leaner cost base together with a strong liquidity position gives us confidence in our ability to withstand uncertainties around the pace of recovery in international travel and benefit from the eventual rebound.”
Rolls-Royce was hammered by the collapse in air travel during the Covid-19 pandemic, plunging into the red last year with a pre-tax loss of £4bn, compared with a profit of £583 million in 2019, driven by the company's "power by the hour" business model.
Mark Crouch, analyst at multi-asset investment platform eToro, says one of the reasons the jet engine maker struggled so badly during the pandemic was because the fortunes of its largest division, civil aerospace, are so interlinked with the airline industry – one of the sectors worst affected by the pandemic.
“Put simply, the engineering giant gets paid by the number of hours its engines fly, so with international travel being severely curtailed this past 17 months, Rolls-Royce has seen its revenue plunge," he said.
“Its half-year results show that its engines flew more hours in the six months to the end of June, while £1bn of planned cost-cutting and £2bn of non-core business disposals have helped it return to profit for the period."
The company said on Thursday that its cost-cutting programme in its civil aviation arm put it on track to make £1bn in savings this year.
The group also said it could reach free cash flow of £750m as early as 2022, but the slow pace of the travel recovery means that this is now more likely to happen later.
During the first half of this year, flying hours on Rolls-Royce’s large engines were at 43 per cent of the pre-pandemic level, up from 34 per cent in the preceding six months, and slightly higher than the 40 per cent recorded in the first few months of this year.
Looking ahead, Mr East said he was encouraged by trends the company was seeing, with large engines in aircraft used on domestic routes in China and the US “returning to levels last seen in 2019”.
However, despite the lifting of some travel restrictions, revenues in civil aerospace fell 13 per cent to £2.2bn in the first six months of this year.
The group was buoyed, meanwhile, by its resilient defence arm, which makes engines for military jets and powers Britain's nuclear submarines, plus a recovery in its power systems unit, which makes engines for boats, trains and other vehicles.
Neil Shah, executive director at Edison Group, said the company's improved performances across its businesses could indicate future growth.
"Underlying revenue in defence increased by 17 per cent to £1.7bn, with the order book covering more than 70 per cent of 2022 expected revenues. Revenue in power systems were largely stable with order intake up 19 per cent to £1.4bn," Mr Shah said.
This week the company confirmed talks about selling ITP Aero – its Spain-based aircraft engine components arm – to Bain, with speculation it could sell for €1.6bn.
The group is also making significant investments into low carbon and net-zero technologies as it looks to increase its R&D spend by 75 per cent by 2025 as it strives to become carbon neutral by 2050.
“Our net zero pathway and targets, announced in June, set out our plan to enable the sectors in which we operate achieve net zero by 2050 by driving step-change improvements in engine efficiency, helping accelerate the take-up of sustainable fuels and developing new technologies," Mr East said,
Zayed Sustainability Prize
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Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
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Specs
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More than 2.2 million Indian tourists arrived in UAE in 2023
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World Mental Health Day
Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
Tottenham's 10 biggest transfers (according to transfermarkt.com):
1). Moussa Sissokho - Newcastle United - £30 million (Dh143m): Flop
2). Roberto Soldado - Valencia - £25m: Flop
3). Erik Lamela - Roma - £25m: Jury still out
4). Son Heung-min - Bayer Leverkusen - £25m: Success
5). Darren Bent - Charlton Athletic - £21m: Flop
6). Vincent Janssen - AZ Alkmaar - £18m: Flop
7). David Bentley - Blackburn Rovers - £18m: Flop
8). Luka Modric - Dynamo Zagreb - £17m: Success
9). Paulinho - Corinthians - £16m: Flop
10). Mousa Dembele - Fulham - £16m: Success
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The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
War on waste
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The five pillars of Islam
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2.
3.
4.
5.
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Tomorrow 2021
RESULTS
6pm: Al Maktoum Challenge Round-2 – Group 1 (PA) $55,000 (Dirt) 1,900m
Winner: Rajeh, Antonio Fresu (jockey), Musabah Al Muhairi (trainer)
6.35pm: Oud Metha Stakes – Rated Conditions (TB) $60,000 (D) 1,200m
Winner: Get Back Goldie, William Buick, Doug O’Neill
7.10pm: Jumeirah Classic – Listed (TB) $150,000 (Turf) 1,600m
Winner: Sovereign Prince, James Doyle, Charlie Appleby
7.45pm: Firebreak Stakes – Group 3 (TB) $150,000 (D) 1,600m
Winner: Hypothetical, Mickael Barzalona, Salem bin Ghadayer
8.20pm: Al Maktoum Challenge Round-2 – Group 2 (TB) $350,000 (D) 1,900m
Winner: Hot Rod Charlie, William Buick, Doug O’Neill
8.55pm: Al Bastakiya Trial – Conditions (TB) $60,000 (D) 1,900m
Winner: Withering, Adrie de Vries, Fawzi Nass
9.30pm: Balanchine – Group 2 (TB) $180,000 (T) 1,800m
Winner: Creative Flair, William Buick, Charlie Appleby
'Skin'
Dir: Guy Nattiv
Starring: Jamie Bell, Danielle McDonald, Bill Camp, Vera Farmiga
Rating: 3.5/5 stars
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Upul Tharanga (captain), Dinesh Chandimal, Niroshan Dickwella
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Vishwa Fernando, Akila Dananjaya, Jeffrey Vandersay
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
World Mental Health Day
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Overview
What: The Arab Women’s Sports Tournament is a biennial multisport event exclusively for Arab women athletes.
When: From Sunday, February 2, to Wednesday, February 12.
Where: At 13 different centres across Sharjah.
Disciplines: Athletics, archery, basketball, fencing, Karate, table tennis, shooting (rifle and pistol), show jumping and volleyball.
Participating countries: Algeria, Bahrain, Comoros, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Saudi Arabia, Sudan, Syria, Tunisia, Qatar and UAE.
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MORE FROM ED HUSAIN: The UAE-Israel accord is a win for every Muslim
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
MATCH INFO
Manchester United 1 (Fernandes pen 2') Tottenham Hotspur 6 (Ndombele 4', Son 7' & 37' Kane (30' & pen 79, Aurier 51')
Man of the match Son Heung-min (Tottenham)
Tomorrow 2021
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Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
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Rashmee Roshan Lall: Who are the women driving Joe Biden's success?
TECH%20SPECS%3A%20APPLE%20WATCH%20SERIES%208
While you're here
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
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Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
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MATCH INFO
Uefa Champions League, last 16, first leg
Ajax v Real Madrid, midnight (Thursday), BeIN Sports
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Volvo ES90 Specs
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Power: 333hp, 449hp, 680hp
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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
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Global state-owned investor ranking by size
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1. |
United States |
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2. |
China |
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3. |
UAE |
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4. |
Japan |
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5 |
Norway |
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6. |
Canada |
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7. |
Singapore |
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8. |
Australia |
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9. |
Saudi Arabia |
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10. |
South Korea |
The Al Barzakh Festival takes place on Wednesday and Thursday at 7.30pm in the Red Theatre, NYUAD, Saadiyat Island. Tickets cost Dh105 for adults from platinumlist.net
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Brief scores:
Manchester City 3
Bernardo Silva 16', Sterling 57', Gundogan 79'
Bournemouth 1
Wilson 44'
Man of the match: Leroy Sane (Manchester City)
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Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
