Rolls marine sale won’t affect power systems

Warren East Chief executive Warren East said Rolls-Royce had “carved out an industry-leading position in ship intelligence and autonomous shipping"
Industry Database

Rolls-Royce’s MTU & Bergen Engines businesses will be unaffected by the company’s plans to consider selling its commercial marine business.

The company had earlier stated it would undertake a strategic review of its commercial marine operation due to weak demand and restructure operations to civil aerospace, defence and power systems business strands.

Rolls-Royce stated: “Rolls-Royce would like to make it clear that our Power Systems business including MTU & Bergen Engines is unaffected by the decision to start a strategic review of our Commercial Marine operation.”

Defence business

During the first quarter of 2018 the operations which supply complex power and propulsion systems to naval customers will become part of an enlarged defence business named Rolls-Royce Defence, comprising the current defence aerospace business and its nuclear submarines operation.

Rolls-Royce said the marine business, which provides ship design and onboard equipment mainly for the offshore oil and gas and commercial marine markets and has its largest facilities in Norway and Finland, had suffered from the oil and gas market downturn. It has subsequently aimed to cut costs by divesting non-core businesses, reducing staff numbers and reducing the number of sites from 27 to 15.

Taking into consideration progress in ship intelligence and autonomous vessels and investment in new facilities and new technologies, Rolls-Royce said now is an appropriate time to review its marine business ownership.

Retained value

Chief executive Warren East said the business had “carved out an industry-leading position in ship intelligence and autonomous shipping and it is only right that we consider whether its future may be better served under new ownership.”

In 2016, Marine contributed £1,114m revenue and generated a loss of £27m. Within this, the commercial marine business, which supplies equipment and vessel design across the oil and gas, merchant and other commercial markets, accounted for 75% of revenues while the Naval operations accounted for 25% and achieved a small profit.

By Rebecca Jeffrey

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