Rolls-Royce warns of currency impact on revenues this year

UK engineering group Rolls-Royce warned on Friday that shifts in currency exchange rates could hit reported revenues this year but possibly not profits, maintaining its current forecast.

The world's second-largest maker of aircraft engines after General Electric , said profits would be more weighted towards the second half of the year and that currency effects could wipe 350 million pounds (USD 540 million) from its revenue this year.

It said its current forecast for the year excluded the effects of currency translation, citing the strong US dollar but a weak euro and Norwegian crown as currencies that impact its results although the overall effect on reported profits would be neutral.

"If rates remain at the average levels seen so far in 2015, these movements would be broadly offsetting for earnings," the company said in a statement. "However, for revenue we would expect a roughly 350 million-pound reduction from translation."

Rolls-Royce shares were up 1.2 percent at 1029 pence by 0727 GMT, valuing the company at 18.9 billion pounds.

Following a troubled year of profit downgrades, job cuts and cancelled orders, Rolls-Royce announced in April that Chief Executive John Rishton was stepping down, to be replaced from July by Warren East, the former chief executive of chip designer ARM .

The company's most recent forecast for 2015 was given in February, when it predicted it would make a pretax profit this year of between 1.4 billion and 1.55 billion pounds.

That equates to a profit decline of as much as 13 percent this year compared with 2014, a fall which it blamed on a low oil price creating uncertainty and leading to delayed orders.

However, Rolls-Royce was last month buoyed by a USD 9.2 billion deal to supply engines for 50 A380 aircraft to Dubai's Emirates airline[EMIRA.UL], the biggest deal in a history which dates back to 1884.

The company, which also makes military jet engines, propulsion systems for ships and power systems used by oil and gas firms, said 1,300 people had left so far under a plan that foresees 2,600 job cuts.

A plan to boost profitability in its aero-engines business, which in 2014 accounted for almost half its revenues, is already underway to enable it to better compete with General Electric.