British aerospace group Rolls-Royce has reported a plunge in interim profits after airlines' slashed engine orders in response to an industry slump, outweighing a robust performance by its defence business.
Rolls-Royce said pre-tax profits fell by 76 per cent in the six months to June to just Stg£33 million.
Pre-tax profits excluding one-off items and goodwill amortisation fell by 45 per cent to £104 million, slightly above analyst expectations.
Rolls-Royce said it expects to deliver 870 new civil engines in 2002, a fall of 36 per cent from 2001.
But strong after-market services and a solid performance by its defence business helped Rolls-Royce achieve a record order book of £16.7 billion.
"We have today announced results for the first half of 2002 in line with earlier guidance," Mr Ralph Robins, chairman of Rolls Royce.
"We have a balanced business portfolio, strong market positions as evidenced by our record order intake, a growing after-market and a lower cost base.
"We have made excellent progress with our restructuring programme, which we accelerated as a result of the events of September 11th 2001. I thank our employees and unions for their support during this difficult task."