RR. Rolls-royce Holdings Plc

By Robert Wall

LONDON--Rolls-Royce Holdings PLC (RR.LN) on Tuesday said it swung to a full-year GBP4.03 billion ($5.05 billion) net loss and suffered a sharp decline in operating profit stung by a settlement over corruption charges, the fall in the British pound and setbacks on high-profile aircraft engine programs.

Rolls-Royce, best known for making aircraft engines for Boeing Co. and Airbus SE long-range planes, reported a GBP83 million profit the year prior. The loss in the latest year reflected a large, non-cash accounting hit from the revaluation of U.S. currency hedges after the British pound slumped in the wake of the Brexit vote. It included a GBP671 million a one-time charge for bribery settlements with U.S., British and Brazilian authorities.

The company's more closely watched underlying pretax profit, that strips out one-time items and currency fluctuations, fell for a third year to GBP813 million from GBP1.43 billion in the year earlier, ahead of expectations. Underlying sales fell 2% to GBP13.4 billion.

Earnings this year will only be modestly better, Rolls-Royce said. Underlying free cash flow, which was GBP100 million last year, should be similarly weak in 2017, the company said.

Rolls-Royce a year ago announced its first dividend cut since 1992 to maintain balance sheet health amid falling profits. The company said it would pay a 7.1 pence final dividend or 11.7 pence for the full-year compared with 16.4 pence for 2015.

Write to Robert Wall at Robert.Wall@wsj.com

(END) Dow Jones Newswires

February 14, 2017 02:50 ET (07:50 GMT)

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