Marine
|
2009 |
2008 |
| Order book (£bn) |
3.5 |
5.2 |
| Underlying revenues (£m) |
2,589 |
2,204 |
| Underlying services revenues (£m) |
785 |
712 |
| Underlying profit before financing (£m) |
263 |
183 |
The Marine business has continued to perform well, with further strong revenue and profit growth despite a challenging trading environment. £1.2bn of new orders were booked in the year. Modest cancellations of £385m and a further year of strong revenue growth caused the year-end order book to decline to £3.5bn.
The offshore oil and gas sector remains encouraging, with continued deepwater developments in a number of major offshore locations. These include Brazil, West Africa and Russia. The market for specialist vessels continues to offer good opportunities.
A number of important milestones were achieved during the year. The Littoral Combat Ship (LCS) completed sea trials, the WR21 powered Type 45 Destroyer entered service with the Royal Navy and the nuclear powered Astute class submarine progressed to its commissioning phase. In addition the Far Samson, the world’s most powerful offshore vessel, designed and equipped by Rolls-Royce, entered service.
The Group continued to expand its network of service centres with six new facilities opened in Seattle, Galveston, Newfoundland, Rio de Janeiro, Genoa and Dubai and with a new customer training facility being developed in Norway.
Market leading positions in the offshore oil and gas sector were further extended with the acquisition of a 33 per cent holding in ODIM ASA, a specialist in marine handling systems.
Rolls-Royce and Royal Caribbean Cruises have settled the lawsuit regarding the Mermaid podded propulsion system which experienced technical issues that have been resolved. The costs and settlement of this claim were partially covered by provisions carried forward from prior years and had no significant effect on 2009 trading performance.
2009 saw strong growth in both original equipment revenues, which increased by 21 per cent, and service revenues, up by ten per cent. Services growth reflected the increasing installed base of equipment and the expanding service network.
Margins and profitability made progress in the year. A combination of better operational performance, lower input costs and more favourable contract pricing all contributed to a strong improvement in margins to more than ten per cent for the year, and a 44 per cent increase in underlying profits.
Outlook
The order book remains strong, despite a slow down in new order activity. Marine’s market leading position in the offshore sector, demand for high specification vessels and the opportunity to continue to develop services provide good visibility of performance. In 2010 revenues and profits are expected to be similar to those in 2009.