|Order book (£bn)||1.3||1.3|
|Underlying revenues (£m)||1,028||755|
|Underlying services revenues (£m)||470||370|
|Underlying profit/(loss) before financing (£m)||24||(2)|
Energy made solid progress in 2009, despite reduced demand and difficult financing conditions in the oil & gas and power generation markets. Improvements in operational performance were accompanied by exceptional revenue growth in the period. We continued to invest in low carbon technologies, including the tidal power demonstrator and the new civil nuclear business.
Despite the challenging environment, order intake of £0.9bn in the period enabled the order book to remain resilient at £1.3bn at the end of 2009. Revenues increased by 36 per cent and exceeded £1bn for the first time.
In the main, oil and gas companies continued to move ahead with substantial investment plans, albeit more cautiously than in previous years. The progress of new power generation programmes has slowed because of a lack of affordable project finance and lower demand for electricity.
Order growth in prior years and improved USD translation rates helped Energy deliver a 45 per cent improvement in original equipment revenues, with both oil and gas and power generation contributing.
The Group’s oil and gas activity has remained particularly robust, and a growing installed base and high utilisation rates contributed to a 27 per cent increase in service revenues across the oil & gas and power generation markets.
The Group continues to focus on improving operating performance and has invested in new assembly facilities and test beds to support both improved execution and future load growth.
In low carbon technology programmes, the tidal power demonstrator project in the Pentland Firth, Scotland is expected to commence trials within the next year. Ongoing development of the fuel cell technology programme continued with investment at a lower level than in prior years.
The Group’s civil nuclear ambitions made progress through 2009 as we continued to expand the civil nuclear team. Rolls-Royce announced that it will lead a UK Government-supported Nuclear Advanced Manufacturing Research Centre, and will develop a new UK based manufacturing facility.
As a result of strong growth in revenues, improving operational performance and reduced investment in fuel cells, profitability improved by £26m in the period.
Improved operational performance and reduced investment in new programmes will cause profits to approximately double in 2010.