British airplane engine manufacturer Rolls-Royce, which is (no longer) connected to the luxury car manufacturer, has sent out another profit warning, the third in about a year's time. The company has also decided it will temporarily halt its buyback of shares.
Low oil prices
Rolls-Royce had expected an EBITDA between 1.4 and 1.55 billion pounds (1.97 - 2.18 billion euro), but has now adjusted that downward, to a sum between 1.3 and 1.47 billion pounds (1.83 - 2.07 billion euro). The Brits point to the low oil prices and a decreased demand for several types of air plane engines for these weak results. On top of this bad news, Rolls-Royce had already announced, earlier this month, that it would cut more than 3,000 jobs.
The profit alert closely follows the appointment of a new CEO, Warren East. He took over from John Rishton a few days ago. He declared to the Financial Times that he was "disappointed with the announcement [of the profit alert] and its impact on investors and employees". "Despite the market conditions, it is our responsibility to build a sustainable enterprise, no matter what comes our way. That will be my priority over the next few years", he said.