Rolls-Royce basks in expanding African footprint

In Summary

With a growing customer portfolio for its civil aerospace and power systems products, British propulsion and […]

With a growing customer portfolio for its civil aerospace and power systems products, British propulsion and power systems maker Rolls Royce, sees itself achieving dominance in the African market in the not-too-distant future.

In background notes to its 2023 results, which saw an operating profit of £1.6bn and underlying margin of 10.3pc, Rolls-Royce says its engines currently power more than 49 of 113 widebody aircraft in service with African carriers. The firm has also been selected to power 74 of the 88 widebodies on order in the region, while it also powers another 95 regional aircraft in service on the continent.

“When adding the order book to in-service aircraft, we see an uplift in market share from 44pc to 61pc,” the company says.

With 20 A350-900s and ten Boeing 787s in service, as well as another four A350-1000s on order, Ethiopian is currently the biggest of Rolls-Royce 23 African widebody airline customers.

Other operators of Rolls-Royce powered aircraft include: Afriqiyah Airways, Air Austral, Air Algérie, Airlink, Air Mauritius, Air Namibia, Air Peace, Air Senegal, Air Tanzania, Alexandria Airlines, ALS Kenya, Egyptair, Libyan Airlines Libyan Wings, Max Air, Med-View Airline, Proflight Zambia, Rwandair, South African Airways, TAAG, Tunisair and Uganda Airlines.

Meanwhile, the company which opened its East African headquarters in Nairobi last June, also boasts an expansive presence in power generation, with its Power Systems business employing 150 people across its offices in Nairobi, Cape Town, Johannesburg and a satellite office in Zambia.

Its subsidiary, Rolls-Royce Solutions Africa, specialises in large engines, propulsion systems and distributed energy systems, including liquid fuel and gas reciprocating engines for use in electric power generation and storage, mining, rail and marine applications.

“We are active in all countries in Southern and Eastern Africa, and our product footprint is extensive across the whole of Africa, with Nigeria, Ghana, Mozambique and Angola having some of the larger installed bases in Africa -although these markets rely upon third party distributors, systems integrators and developers.”

As of January 2024, the company had 180 engines – 124 in South Africa and 56 in Zambia, supporting power generation for mining and energy utilities.

Describing its 2023 performance as a “step-change” driven by transformation that also created “strong momentum into 2024,” Rolls-Royce reported an operating profit of £1.6bn and underlying margin of 10.3pc, “reflecting the impact of our strategic initiatives, with commercial optimisation and cost efficiency benefits across the Group.”

Free cash flow was £1.3bn, return on capital more than doubled to 11.3pc, while statutory net cash flow from operating was £2.5bn – some £1.0bn higher year on year. Net debt was £2.0bn, down from £3.3bn at the end of 2022.

Profit for 224 is projected at £1.7bn -£2.0bn with associated free cash flow of £1.7bn – £1.9bn.


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