LONDON: UK enginemaker Rolls-Royce on Tuesday expressed confidence over plans for Britain’s departure from the European Union, but revealed that the pound’s Brexit-fuelled slump has left it languishing in the red.

There is an increased chance that Britain will crash out of the EU in October with no trade deal in place under new Prime Minister Boris Johnson, meaning it would default to the World Trade Organisation (WTO) tariff system.

Chief Executive Warren East, speaking to BBC radio, said Rolls-Royce was well positioned because it already traded under WTO rules.

“We would obviously prefer a deal because that is probably the best chance of providing certainty for business, but we’ve always been prepared for contingency -- prepared for a no-deal of some kind,” East added.

“We’re not a ‘just-in-time’ business like some other businesses, so we are actually in a much stronger position than others.

“As far as tariffs and the like are concerned, then most of our business is in aerospace and WTO rules apply anyway.” Rolls-Royce has spent $121m to prepare for Britain’s EU exit.

On Tuesday, Rolls also reported “good progress” on fixing problems with its troubled Trent 1000 plane engines. However, the group’s total net loss still hit 909m in the six months to June.

That compared with a broadly similar after-tax loss of 954m a year earlier.

The 2019 performance was partly skewed by a hefty 763m charge on the tumbling value of the British pound.

Published in Dawn, August 7th, 2019