British
engine maker Rolls-Royce on Friday slashed its earnings forecasts,
blaming tumbling oil prices which have hurt revenues at its marine
offshore division.
Pre-tax profits this year were expected to be
between £1.4 billion and £1.55 billion (1.89 billion euros/2.09 billion
euros, $2.2 billion/ $2.4 billion), Rolls-Royce warned in a results
statement.
Earnings before tax meanwhile sank eight percent to £1.62 billion in 2014, it added.
Net profits however collapsed on sliding defence revenues, adverse foreign exchange moves and the sale of its energy business.
Earnings
after tax nosedived to £69 million in 2014, hit by the revaluation of
currency hedging, from £1.367 billion a year earlier. "The external
environment has deteriorated in some of our major markets," Rolls-Royce
said in the earnings release.
"In particular, oil prices have
halved over this period, creating increased uncertainty for many of our
markets and customers, particularly in marine offshore."
World
oil prices tumbled by 60 percent in value in the six months to January,
rocked by plentiful crude supplies and the strong dollar.
Rolls-Royce
also posted Friday the first drop in underlying revenues for the first
time in a decade, sliding six percent to £14.588 billion.
"2014
has been a mixed year during which underlying revenue fell for the first
time in a decade, reflecting reduced spending by our defence customers,
macroeconomic uncertainty, and falling commodity prices," said chief
executive John Rishton in the statement.
