Brexit brings down Rolls Royce. The group ended 2016 with a net loss of 4 billion pounds (4,8 billion euros). This is one of the worst balance sheets in the history of the British industrial system, even if analysts had forecast an even worse drop (685 million).
The free fall of the pound (-20%) following the referendum of last June 23, when the British voters decided to leave the European Union weighed decisively on the collapse.
The reason? Today Rolls Royce's core business is the manufacture of engines and turbines for the aerospace industry, where most trade is in dollars. The devaluation of the pound therefore deprived the group of an important competitive advantage on the exchange front, forcing it to cut the value of many collections.
In addition, Rolls Royce was penalized by a 671 million pound (almost 900 million euro) fine for corruption, the result of a plea deal following various allegations contested by the British, American and Brazilian judicial authorities.
The case concerned some high-level managers accused of bribing public officials in various countries of the world to allow Rolls Royce to win tenders and contracts.
Despite everything, the loss is realized only at an accounting level, with write-downs and adjustments. Without calculating the effects of Brexit and the fine, Rolls Royce's accounts improved and 2016 ended with revenues on the rise.
