QUARTERLY NEWS UPDATE
4 April 2006
QUARTERLY NEWS UPDATE FROM ROLLS-ROYCE:
FIRST QUARTER REVIEW, 2006
Highlights of the first quarter reinforced two important Rolls-Royce themes:
the international nature of the Group's business activities, and the continuing
development of its services capabilities.
An international business
China Southern Airlines ordered Rolls-Royce Trent 700 engines for an additional
ten A330s, with a ten-year TotalCare® contract - total business worth around
$600 million.
The first RTM322-powered MH101 helicopter was delivered to Japan's Defense
Agency (JDA) and Japanese Maritime Self Defense Force (JMSDF). The JMSDF plans
to buy a total of 14 RTM322-powered EH101 helicopters.
Technology agreements were signed with universities in Korea and Germany. In
Korea, a technology collaboration agreement with Pusan National University
(PNU) will lead to joint research activities to develop ultra-efficient,
ultra-light weight heat exchangers. In Germany, a new University Technology
Centre (UTC) was launched at Dresden University to study the field of
lightweight structures and materials.
Rolls-Royce continued its long-term tsunami rehabilitation activities, opening
a second Primary Care Clinic in Indonesia and funding a new school in the
Indian village of Pallayar, where 90 per cent of buildings were destroyed in
the tsunami of December 2004.
Growing services capabilities
Rolls-Royce has taken full ownership of Data Systems & Solutions LLC (DS&S), a
world leader in predictive services and high-integrity systems. DS&S was
established in 1999 as a joint venture between Rolls-Royce and Science
Applications International Corporation
Hong Kong Aero Engine Services Limited (HAESL), which is 45 per cent owned by
Rolls-Royce, announced that it will expand its aero jet engine overhaul and
component repair facility at Tseung Kwan O, in Hong Kong's New Territories.
Corporate news
Rolls-Royce announced full year results for 2005, with a record order book,
sales growth and an increase in profits. Growth in sales and the order book and
the Group's consistent focus on improved efficiency underpin its expectations
of further growth in profits and positive cash flow in 2006.
Other business highlights during the quarter:
Civil
* Finnair became the first airline to select the Rolls-Royce Trent 1700,
which will power its fleet of Airbus A350-900s in a deal worth
$470 million at list prices. Deliveries of the nine firm, plus four option
aircraft are scheduled to begin in 2012. The deal also means another new
customer for the Rolls-Royce Trent family of engines.
* The Rolls-Royce Trent 1000, being developed for the Boeing 787 Dreamliner,
successfully completed its first test bed run, exactly to schedule against
the date of 14 February set almost three years earlier. The Trent 1000 is
launch engine for the 787 following its selection by launch customer ANA
(All Nippon Airways) and will enter service in mid 2008.
* Icelandair selected the Rolls-Royce Trent 1000 engine to power its new
fleet of 787s. The order, potentially worth up to $650 million at list
prices, is for engines to power two firm aircraft, plus up to five purchase
rights, and includes a lifetime TotalCare® maintenance agreement.
* Mexican low-cost start-up airline Volaris selected the International Aero
Engines' V2500 to power its fleet of 16 firm and 40 option Airbus A319
aircraft, business worth up to $320 million to Rolls-Royce, which is a
senior shareholder in IAE.
* A follow-on order for V2500 engines for Indian low-cost carrier Air Deccan,
to power 30 additional Airbus A320 family aircraft, is worth $170 million
to Rolls-Royce, which is a senior shareholder in the International Aero
Engines consortium which produces the engine.
Defence
* Rolls-Royce has secured an order from the UK Ministry of Defence for 22
RTM322 helicopter engines to power the MoD's existing Apache and Merlin Mk
3 aircraft. The order is worth approximately £12 million to Rolls-Royce and
includes around 30 modules in addition to the whole engines. Deliveries
will begin in 2007 and continue until the beginning of 2009.
* The F136 interchangeable engine for the Joint Strike Fighter resumed
testing on schedule in February. Although the 2007 US Department of Defense
budget request failed to include future funding for the F136, this
recommendation must receive approval from Congress before it can be
ratified. Both Rolls-Royce and GE are continuing to promote the F136
programme to key supporters in Congress.
* The US Naval Air Systems Command has signed two contracts - one for
equipment and one for services - for the V-22 Osprey aircraft. The purchase
contract is for 28 AE 1107C-Liberty engines to power the MV-22 and CV-22
versions of the aircraft in 2006-07. The services element includes a Power
By The Hour® contract for maintenance support in 2006.
* EPI Europrop International, the consortium comprising Rolls-Royce, ITP, MTU
and Snecma that is developing the TP400-D6 engine for the A400M military
transport aircraft, carried out the first test with its propeller fitted.
* Rolls-Royce and the U.S. Army extended a services agreement on Model 250
engines in OH-58D Kiowa Warrior helicopters. The initial year of the
five-year Customer Logistic Support contract is valued at $18.5 million.
With other recently-announced contracts, Rolls-Royce now provides
aftermarket services for the U.S. Army, Air Force, Navy, Marine Corps and
the Department of Homeland Security, as well as international defence
partners.
* In its annual helicopter 10-year sales forecast, Rolls-Royce predicted
deliveries of nearly 11,000 turbine rotorcraft, valued at $95 billion, by
2015. Civil aircraft are projected at 5,161 sales, with 5,687 military
deliveries. The installed engine value is estimated at nearly $9 billion
Marine
* Rolls-Royce unveiled the latest design in its family of coastal protection
vessels, building on a series of order successes worldwide. The latest
design, the UT527, delivers firefighting, emergency towage and pollution
control capability and can hold up to 320 survivors of a marine disaster. A
medium-sized helicopter and two smaller daughter craft are also available
for specific missions. Navies, coastguards and public agencies are
increasingly interested in ships which can monitor, patrol and protect
their waters and also carry out pollution control, salvage and fire
fighting tasks
Energy
The Petroleum Authority of Thailand (PTT) has ordered three additional RB211
gas turbine compression packages for use offshore on a PTT riser platform in
the Gulf of Thailand. In 2005, PTT ordered five RB211 packages. This new
offshore development is part of Thailand's gas pipeline master plan designed to
increase the supply of natural gas to the Eastern region of the country.
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For further information please contact:
Caroline Harris
Tel: +44 (0) 207 227 9232
caroline.harris@Rolls-Royce.com
Martin Brodie
Tel: +44(0) 207 227 9140
martin.brodie@Rolls-royce.com