Rolls-Royce has announced two new contracts worth a total of 2.2 billion US dollars (£1.4 billion) two weeks after issuing the latest in a series of profit warnings.

The deals relate to Trent 700 engines for 20 Airbus A330 regional aircraft operated by SAUDIA, Saudi Arabia’s national airline.

Leasing company International Air Finance Corporation, which owns the aeroplanes, is buying the engines for 930 million US dollars (£600 million).

Rolls-Royce has also signed a long-term servicing contract worth 1.3 billion US dollars (£840 million) directly with SAUDIA.

It said the Trent 700 was now the clear market leader on the A330 with more than 60% of new orders over the last three years.

Eric Schulz, the firm’s president for civil large engines, said: “We welcome our customer’s confidence in the Trent 700 as the best solution for fuel burn, emissions and noise performance as well as delivering unrivalled reliability for Middle East operations.”

The announcements did not alter what Rolls-Royce said on July 6 when it issued its latest profits warning.

But analysts at Killik said they would “provide some comfort to investors”. Shares were little changed.

At that time of the warning the company, which has major bases in Bristol and Derby, blamed a number of factors including reduced demand for business jets and weaker sales in its marine market.

The firm, which has issued a series of profits downgrades over the last 12 months, said its annual group underlying profit would be between £1.3 billion and £1.5 billion, as much as 5% lower than it had previously suggested.

Source: Business-Reporter