UK’s Rolls-Royce confident on profit growth despite supply chain woes

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LONDON (Reuters) -Britain’s Rolls-Royce stuck to guidance for annual profit growth of at least 30% this year as its airline customers flew more and demand for power for data systems and defence equipment continued to grow.

That strength offset problems in the aerospace supply chain which has caused delays for parts, and which the company warned in August would cost 150 million pounds ($194 million) to 200 million pounds this year.

“Continued good performance year to date gives us further confidence in the delivery of our 2024 guidance despite a supply chain environment which remains challenging,” Chief Executive Tufan Erginbilgic said on Thursday.

Rolls-Royce, Airbus’s exclusive engine partner on its widebody planes and a supplier to Boeing’s 787, is forecasting underlying operating profit of between 2.1 billion pounds and 2.3 billion pounds for this year.

The company, which also powers ships and submarines and makes power generation systems, in August upgraded its outlook and reintroduced the dividend which had been axed during the pandemic when a halt to air travel left it fighting for its survival.

Shares in Rolls-Royce have surged 487% since Erginbilgic took over as its chief executive in January 2023.

($1 = 0.7729 pounds)

(Reporting by Sarah Young; Editing by Kate Holton)