Britain’s Rolls-Royce said on Wednesday the idea was considering the sale of its commercial marine business, which has been hit by weak demand in offshore oil along with also gas markets, as part of a restructuring of the company into three core units.
Shares within the company jumped after the idea said the loss-creating unit could be sold. They were trading up 7.2 percent at 1330 GMT.
The announcement came as part of a restructuring of the aero-engine maker into civil aerospace, defense along with also power systems units, with naval marine along with also nuclear submarines consolidated into defense along with also civil nuclear into power systems.
Chief Executive Warren East said the latest overhaul could enable the company to respond quicker to meet the needs of its customers, both within the wide body civil aviation market along with also in defense, as well as reduce costs.
“the idea will create a Defense operation with greater scale within the market, enabling us to offer our customers a more integrated range of products along with also services,” he said.
“the idea will also strengthen our ability to innovate in core technologies along with also enable us to take advantage of future opportunities in areas such as electrification along with also digitalization.”
Rolls-Royce had responded to the downturn in oil along with also gas markets since 2015 by reducing the number of sites in its marine business via 27 to 15, along with also cutting the unit’s workforce by 30 percent to 4,0, with the majority today based within the Nordic region.
Nonetheless, the marine unit generated a loss of 27 million pounds on sales of 1.1 billion pounds in 2016, with the bulk of the business supplying equipment along with also vessel design across the oil along with also gas, merchant along with also various other commercial markets.
East said the business “responded admirably” to the downturn by cutting its cost base, along with also had also carved out an industry-leading position in ship intelligence along with also autonomous shipping.
“the idea can be only right which we consider whether its future may be better served under completely new ownership,” he said.