British engineering company Rolls Royce has lowered its profit outlook for the third time this year, blaming lower oil prices and deterioration in the offshore oil and gas sector.
The company said on Monday it expected its 2015 revenue to be between $2.06bn and $2.29bn compared to an estimate of $2.18bn to $2.41bn it issued in February.
It also added that as the offshore markets continue to weaken, its marine profit would drop by around $132mn in 2015 and 2016.
“Overall, performance for 2015 for the bulk of our business is expected to be broadly in line with previous guidance. However, further deterioration in the offshore market is now expected to impact full year profit for Marine,” the company said in a statement.
“Free cash flow for 2015 is now expected to be between £(150)m and £150m, compared to previous guidance of between £50m and £350m”, Rolls added.
It also said that due to the weaker near-term cash outlook, it would discontinue its $1.56bn share buyback programme, of which it had already completed $777.8mn.
The news comes as the company announced a new CEO earlier this year — Warren East took the reins from John Rishton, who announced his retirement after a difficult four years in charge of the 131-year-old company, the BBC reports.
“I am clearly disappointed by today’s announcement and the impact this will have on our investors and employees,” it quoted East as saying.
“Notwithstanding the market developments, it is our responsibility to build a business that is sustainable and resilient, no matter what is thrown at us, and this will be my fundamental priority for the next few years.”
