London, United Kingdom – Rolls-Royce, the British maker of plane engines and other power systems, said Thursday that it rebounded into profit last year following major restructuring that involved sizeable job losses.
The company swung to a net profit of £2.4 billion ($3.0 billion) last year from a loss after tax of £1.3 billion in 2022, Rolls said in a statement.
“Our transformation has delivered,” said Tufan Erginbilgic, chief executive of the group best known for its engines powering Airbus and Boeing commercial aircraft.
“This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures.”
Shares in Rolls soared almost ten percent in afternoon trading, topping London’s benchmark FTSE 100 index.
“Rolls-Royce’s strong performance in 2023 catapulted the company from adversity to becoming the FTSE 100’s biggest gainer, marking a significant turnaround,” noted Natalya Davies, analyst at research group Edison.
“As Rolls-Royce continues to set the pace, presenting a promising outlook for 2024… the market will await further guidance throughout the year to ensure the company’s sustained success.”
Its share price more than trebled last year but at the end of 2023 it was still only up 6.5 percent over the previous five years.
Erginbilgic began restructuring the group on taking the helm at the start of last year.
In October, he said the group would cut up to 2,500 jobs worldwide, or about six percent of its staff.
Previous CEO Warren East had axed more than 9,000 jobs and launched a major divestment program in 2020 to navigate the fallout from the Covid-19 pandemic across the aviation industry.
Erginbilgic, a dual UK and Turkish national, worked for more than 20 years at energy major BP.