Rolls-Royce suffers a record headline loss of 4.6 billion pounds ($5.8 billion) as a fine to settle bribery charges and the collapse in the pound from Brexit caps a difficult few years for the British aero engine maker. Harvey Biggs reports
BROADCAST: NO ACCESS UK, NO USE AFTER 30 DAYS DIGITAL: NO ACCESS UK-FOCUSED PUBLISHERS, NO USE AFTER 30 DAYS ON ALL PLATFORMS A bribery settlement and the collapse in the pound has pushed Rolls-Royce to a record reported loss of 4.6 billion pounds for 2016. Last month the British aero engine maker said it would pay 671 million pounds to UK and US authorities to settle corruption cases spanning 25 years. The charges levelled at the company include paying bribes to win deals in Indonesia, Thailand, China and Russia. (SOUNDBITE) (English) KEN ODELUGA, MARKET ANALYST, CITY INDEX, SAYING: "The main news here is not the fact that they have made their biggest net loss ever, it is the fact that on an underlying basis the net profit has actually beaten expectations." Rolls has also had to weather the post-Brexit slump in the pound. It was hit particularly hard - as most aerospace deals are done in US dollars, and the company has written off 4.4 billion pounds from currency related contracts. The financial storm has meant the group's underlying profit fell by 49 percent in 2016 to 813 million pounds - down from 1.4 billion pounds the previous year - though, that result, still above expectations. Despite the drop, Rolls said it would maintain its final dividend. (SOUNDBITE) (English) KEN ODELUGA, MARKET ANALYST, CITY INDEX, SAYING: "Rolls-Royce's order book has continued to grow during the quarter, it has got the overhang of the conduct issues largely behind it now. The cost savings programme is on track. I think the outlook is a lot better now." It caps a tough couple of years for the manufacturer, which has been in full restructure mode - driven by Chief Executive Warren East, who took control in 2015. In delivering the results, he said the group expected "modest improvements this year".