Rolls-Royce revenues to hit record highs under Tufan Erginbilgic

Rolls-Royce revenue is expected to hit record levels in another boost to Chief Executive Tufan Erginbilgic’s ambitious turnaround plan.

The FTSE 100 aircraft engine maker raised £7.7bn in the first six months of the year, according to City forecasts.

The 11 percent increase in sales came as international flights returned to pre-Covid levels.

Rolls builds aircraft engines, but makes its money from repairing and maintaining them, so the number of flight hours is crucial to its success.

It has also secured a number of new contracts, including with Indian airline IndiGo, which ordered 60 engines, and VietJet.

Demand for its power generators from data centers and artificial intelligence providers has also skyrocketed.

This is expected to be a growth area for Rolls.

The company is also well positioned to benefit from demand for mini nuclear power plants, known as small modular reactors (SMRs).

Rolls has been designing a model based on the technology it uses to power nuclear submarines for years. It is one of the companies being considered by the government to build a fleet of SMRs for Britain and its designs are being studied by several other European countries.

Erginbilgic has implemented a strict cost-cutting programme (expected to reduce spending by £200m a year by the end of 2025) and has paid down some of Rolls’ significant debt.

Erginbilgic joined in early 2023, when the company was still struggling to recover from the pandemic: Rolls had racked up huge losses as planes were grounded.

But he had been underperforming for years and was already in the middle of an overhaul when Covid hit.

When Erginbilgic joined he was quick to describe Rolls-O’-Lantern as a “burning rig” but his plans have been backed by the market and the shares have risen 375 per cent since he took over 19 months ago.

This year alone they have increased by almost 50 percent.

The surge in defence spending due to the war in Ukraine, which began in 2022, has also helped boost Rolls’ share price.