Rolls-Royce Optimistic about Earnings Fespite Airbus A380 Delays

The chief of British aircraft engine maker Rolls-Royce PLC said Thursday that the company's earnings outlook would not be hurt by its recent suspension in production of engines for the Airbus A380.

The company's civil aerospace deliveries comprise only about 20 percent of its turnover, Rolls-Royce chief executive John Rose told reporters during a visit to Malaysia.

"We make deliveries to Airbus, Boeing, Bombardier, Gulfstream, Embraer, Cessna and a whole range of other companies. This represents a relatively small proportion of our turnover," he said.

Speaking in general about orders from airlines and other companies, Rose said the company's deliveries for the next two years are "completely unaffected by the orders in the shorter term."

He was responding to questions about business outlook following a slowdown this year in the number of planes globally ordered by airlines.

Rolls-Royce said last month it was suspending production of Trent 900 engine for A380 because of delays in the superjumbo airplane project. Rolls-Royce is contracted to supply engines for 48 percent of the current firm orders for the A380, including six by state-owned Malaysia Airlines.

Rose was in Malaysia for the launch Thursday of a tantalum powder plant that is a joint venture between Britain's Metalysis Ltd., Rolls-Royce and the Malaysian government.

The plant aims to produce annually an average 100 tons of tantalum powder, a super-grade chemical used in the manufacture of mobile phones, personal computers, motor vehicles and electronics goods.

It is Metalysis Ltd.'s first production facility outside Britain and will produce about 10 percent of the annual global consumption of tantalum when fully operational by September 2007, the company's chief executive, Graham Cooley, said.

Metalysis set up the plant in Malaysia as part of an agreement with the Malaysian government, which in return has agreed to buy the Trent 900 engines for Malaysia Airlines' fleet of six A380s on order.

"We hope to see more companies setting up such ventures in Malaysia to take advantage of the competitive cost and contribute to the enhancement of our technological capabilities," said Deputy Prime Minister Najib Razak, who inaugurated the plant.

Najib pledged the government's support for science and technology initiatives, saying it has invested heavily in technology-based education and training to develop quality human capital.

"We are still quite a distance away from where we want to be in terms of progress and development in science and technology. But we have no doubt that we can achieve all that we have set out to do and will work tirelessly to achieve our objectives," he said.

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