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Aircraft engine woes to hit Rolls-Royce and weak car market hurts Aston Martin

Edmund Heaphy
Finance and news reporter
A row of Aston Martin sports cars. Photo: Getty

Aircraft engine manufacturer Rolls-Royce (RR.L) said on Thursday that difficulties surrounding its troubled Trent 1000 engine would see it post profits in the lower range of forecasts, while luxury carmaker Aston Martin (AML.L) said that it had made a pre-tax loss of £13.5m in the third quarter.

Revenues at Aston Martin declined by 11% to £250m in the three months, largely on the back of a 16% fall-off in car deliveries.

The luxury carmaker had made a profit of £3.1m in the same period last year.

Rolls-Royce, meanwhile, warned that it would have to accept a £1.4bn dent to its full-year profits because of problems relating to the Trent 1000 engine, which has required a series of design fixes and has been marred by delays.

The company, which is separate from the BMW-owned division that makes luxury Rolls-Royce cars, said it would have to spend time repairing and redesigning components of the engine after it emerged that some turbine blades were corroding faster than expected.

Rolls-Royce is the world’s second-largest maker of aircraft engines, after General Electric.

The company said that, overall, the cash costs of the difficulties related to the Trent 1000 engine would come to £2.4bn between 2017 and 2023.

Rolls-Royce said that operating profits for its current financial year would come in at the lower end of its £600m to £800m forecasts.

CEO Warren East said the company’s top priority was improving customer confidence, noting that Rolls-Royce deeply regretted “the ongoing disruption caused to customers”.

Separately, Aston Martin said that there had been low demand for the Vantage, an entry-level sports car that it unveiled in 2017. It also pointed to a weak market in the UK and Europe, and noted that it would pursue a cost-cutting exercise.

UK sales in the three months fell 22%, with those in Europe falling by 17%. It also saw a sharp drop-off in sales in the Asia Pacific region, where they fell by 34%. Sales in the Americas grew by 2%.

Shares in Aston Martin, which first listed on the London Stock Exchange last year, have been sapped since the carmaker issued a profit warning earlier this year.