BA Boeing Co

By Robert Wall

LONDON--Rolls-Royce Holdings PLC (RR.LN) on Thursday said it fell to a loss in the first-half of the year because of an accounting charge, but promised a stronger performance in the final six months of the year.

It posted a 1.8 billion pound ($2.37 billion) net loss following the revaluation of currency hedges prompted by the weakness of the British currency, down from a GBP360 million profit reported a year earlier.

Rolls-Royce, which makes engines for Boeing Co. (BA) and Airbus Group SE's (AIR.FR) long-range jetliners said underlying profit was GBP77 million as sales retreated 1% to GBP6.5 billion.

The company left its full-year earnings outlook unchanged, with expectations of a decline in sales and revenue. Rolls-Royce in May said its profit would mostly be made in the second half of the year.

Rolls-Royce, no longer affiliated with the luxury car maker, is recovering from a several profit warnings that led it to cut its dividend for the first time since 1992 after profit slumped. The company has suffered lower demand for some of its most profitable products and struggled with the impact on demand from low crude prices on its marine and power-systems operations.

"Order intake has been good and, although known headwinds constrained revenue and profit in the first half, the business remains well positioned to deliver a solid second-half performance," said Chief Executive Warren East, who has just completed his first year in the job.

Mr. East has been trying to trim costs and cut management layers. In May he said about 20% to 25% of the top 2,000 managers may be removed, beyond the 200 that had already lost their jobs.

The interim dividend payment was cut to 4.6 pence from 9.27 pence in the year-prior.

-Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

July 28, 2016 03:02 ET (07:02 GMT)

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