Rolls-Royce Expects Profitability Amid Mideast Conflict Disruptions

Rolls-Royce Maintains Full-Year Profit Guidance Amid Middle East War Uncertainty

British engine-maker Rolls-Royce has maintained its full-year profit guidance, despite the ongoing disruption from the Middle East war. The company expects to "fully mitigate" the disruption, which has been caused by US-Israeli attacks on Iran on February 28. This disruption has resulted in severe air travel disruptions, affecting Rolls-Royce's supplies of engines to the world's biggest aircraft manufacturers, Airbus and Boeing.

Rolls-Royce's chief executive, Tufan Erginbilgic, acknowledged the uncertainty created by the conflict in the Middle East. However, he expressed confidence that the company will be able to fully mitigate the current financial impact of the disruption. Erginbilgic praised the strong start to the year across the company's aerospace, defence, and power systems divisions.

The group has maintained its 2026 targets for an underlying annual operating profit of between £4 billion ($5.4 billion) and £4.2 billion. Erginbilgic stated that the company remains strongly positioned to deliver its mid-term targets, with substantial growth beyond the mid-term from both existing and new businesses.

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Rolls-Royce has undergone a significant turnaround since Erginbilgic took the helm in 2023, leading to repeated upgrades to its outlook. The company's net profit more than doubled last year to £5.8 billion, driven by strong aircraft engine performance and a favourable currency effect linked to a weaker dollar. Additionally, Rolls-Royce has benefited from cost savings, and the group is set to profit further from government spending on defence.

Note: The growth rate for 2026 is calculated based on the lower end of the target range (£4 billion).