(Reuters) – British aerospace engineer Rolls-Royce (RR.L) said its full-year operating profit and free-cash flow would come in at the lower end of guidance as the cost of tackling problems with its Trent 1000 engine rise ever higher.
It said it expected to take an exceptional charge of about 1.4 billion pounds ($1.80 billion) in 2019 on Trent 1000 due to customer disruption and future contract losses.
Chief Executive Warren East said his top priority was improving customer confidence in the Trent 1000.
“We are today announcing additional action to further expand our maintenance capacity and increase our stock of spare engines,” he said on Thursday.
Rolls-Royce increased the in-service cash costs of fixing the problems with the engine that powers the Boeing (BA.N) 787 to 2.4 billion pounds between 2017-2023, 800 million pounds more than it previously guided, with 400 million of the extra spending coming from normal programme contingency.