Rolls-Royce hails a 'strong start' to the year as it eyes £3bn profits despite tariff trade blow
British engineering giant Rolls-Royce hailed a 'strong start' to the year despite the turmoil triggered by Donald Trump's trade war.
At the annual meeting with shareholders in Derby, chief executive Tufan Erginbilgic said 'global tariff increases have created a degree of uncertainty for the industry'.
But he said the FTSE 100 engine maker will 'offset' the impact of the levies 'through the mitigating actions we are taking' including tweaks to its supply chain to avoid the most punishing tariffs.
Shares rose 1.7 per cent, or 12.8p, to 787p, and are up more than eightfold since Erginbilgic took the helm in 2023 and launched a major turnaround.
The trade war between the world's two biggest economies, which has seen President Trump impose taxes of up to 145 per cent on Chinese goods and Beijing hit back with a 125 per cent levy, has shocked the global supply chain.
Rolls, which builds engines for Airbus planes and the Boeing 787, has substantial manufacturing facilities in the US, in addition to Derby, its power systems business in Germany, and a facility in China.
It said it was on course for profit of between £2.7billion and £2.9billion – despite tariffs and the supply chain challenges.
Erginbilgic, whose plan includes cutting 2,500 jobs, said: 'Our transformation is progressing strongly and we continue to expand the earnings and cash potential.
'We are creating a more resilient and agile Rolls-Royce. As a result, we have had a strong start to the year.'
Russ Mould, investment director at AJ Bell, said: 'Rolls is one of the most vulnerable UK-listed companies to US tariffs because of its involvement in aircraft parts, a key export to the States.
'Had the tariff tantrum happened five years ago, Rolls might have struggled to cope given the business was weak.
'Having been nursed back to full health, it now stands a much better chance of coping with tariff pressures.
'Investors are taking unchanged guidance to be a massive win.
The fact Rolls is sticking with previous earnings and cash flow expectations has prompted another leg-up for the share price.'
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