Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Rolls-Royce has raised its profit forecast and plans to pay a dividend for the first time since the pandemic as chief executive Tufan Erginbilgiç’s efforts to restore the UK engineering group’s fortunes pay off.
Shareholders in the FTSE 100 company, whose engines power civil aircraft, submarines and military jets, last received a payout in 2020, shortly before the pandemic.
Announcing its first-half results on Thursday, Rolls-Royce said it would resume payouts at its full-year results. Payments will start at a 30 per cent payout ratio of underlying profit and then shift to a ratio of between 30 per cent and 40 per cent a year.
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Shares in Rolls-Royce surged 10 per cent in early trading after the announcement, taking their gains this year to over 60 per cent.
Since taking over as chief executive in early 2023, Erginbilgiç has focused on rebuilding the group’s balance sheet and improving its profitability.
Rolls-Royce is also benefiting from the rebound in international travel as the company makes most of its money maintaining and servicing its engines when they are flying.
Alongside the resumption of the dividend, Rolls-Royce increased its forecast for underlying operating profit this year to between £2.1bn and £2.3bn. It is targeting free cash flow of between £2.1bn and £2.2bn, higher than its previous guidance of £1.7bn to £1.9bn.
The company is “expanding the earnings and cash potential of the business in a challenging supply chain environment, which we are proactively managing”, Erginbilgiç said on Thursday.
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Revenues in the first six months of the year rose to £8.1bn, up from £6.9bn a year ago. Underlying operating profit surged to £1.15bn from £673mn.
Despite the strong results, Erginbilgiç warned that the supply chain environment remained difficult. The industry has struggled with a shortage of skilled labour and key components coming out of the pandemic, which has hampered plans by Airbus and Boeing to ramp up production of aircraft.
Erginbilgiç said he expected the supply chain challenges to last for another 18 to 24 months.
new video loaded: F.A.A. Said to Have Closed El Paso Airspace Over Military’s Use of Anti-Drone Technology
transcript
transcript
F.A.A. Said to Have Closed El Paso Airspace Over Military’s Use of Anti-Drone Technology
The Federal Aviation Administration lifted an order to ground all flights at El Paso International Airport on Wednesday. The order was initially issued on Tuesday night. The Trump administration claimed a drone incursion caused the El Paso airspace closure. But people briefed on the situation said it was because of the military’s use of anti-drone technology.
“You cannot restrict airspace over a major city without coordinating with the city, the airport, the hospitals, the community leadership. That failure to communicate is unacceptable.” “The information coming from the administration does not add up, and it’s not the information that I was able to gather overnight and this morning. There was not a threat, and — which is why the F.A.A. lifted this restriction so quickly.”
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The Federal Aviation Administration lifted an order to ground all flights at El Paso International Airport on Wednesday. The order was initially issued on Tuesday night. The Trump administration claimed a drone incursion caused the El Paso airspace closure. But people briefed on the situation said it was because of the military’s use of anti-drone technology.
Your guide to what Trump’s second term means for Washington, business and the world
Donald Trump said he “insisted” US talks with Iran should continue in a meeting with Israeli Prime Minister Benjamin Netanyahu on Wednesday that concluded with no agreement on the strategy towards Tehran.
In a Truth Social post on Wednesday afternoon, Trump said he told the Israeli leader that his “preference” was to reach a pact with Iran on its nuclear programme even as Washington continues to weigh new military strikes against the Islamic republic.
Trump wrote: “There was nothing definitive reached other than I insisted that negotiations with Iran continue to see whether or not a Deal can be consummated. If it can, I let the Prime Minister know that will be a preference. If it cannot, we will just have to see what the outcome will be.”
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After the meeting, Netanyahu’s office issued a brief statement on X, saying the two men had spoken about the “negotiations with Iran, Gaza and regional developments”. It added the prime minister had “emphasised the security needs of the state of Israel in the context of the negotiations and the two leaders agreed on continued co-ordination and the close contact between them”.
Ahead of the meeting with Netanyahu, Trump told Axios news on Tuesday that he was “thinking” about deploying a second aircraft carrier to the Middle East. This would be in addition to the Abraham Lincoln carrier strike group, which was sent to the region last month as part of a build-up of the American military presence in the Middle East in preparation for a potential strike on Iran.
When Washington attacked three main Iranian nuclear facilities last June, the US had two aircraft-carrier strike groups positioned in the region.
The US currently has 10 ships in the region, including the Abraham Lincoln aircraft carrier — with dozens of fighter aircraft and thousands of troops on board — in the Arabian Sea. The Pentagon has also deployed two destroyers to the Mediterranean as well as sending more fighter jets and bolstering air defences in the Middle East.
Trump is widely expected to order the USS George HW Bush aircraft carrier to join the Abraham Lincoln carrier strike group in the Middle East. The George HW Bush is off the coast of Florida undergoing training exercises, according to the US Navy.
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The Wall Street Journal on Wednesday reported the Pentagon has told an aircraft carrier strike group to prepare to deploy to the Middle East and that a deployment order could come within hours.
The navy said it could not speak to future operations and the Pentagon said it had no information. The White House did not respond to a request for comment.
Two incidents occurred last week between the US and Iran in Middle Eastern waters. American forces shot down an Iranian drone as it approached the Abraham Lincoln. Separately, the Islamic Revolutionary Guard Corps threatened to board and seize a US-flagged tanker in the Strait of Hormuz, prompting an American warship to respond.
The US attorney general Pam Bondi attacked and insulted Democrats during a House judiciary committee hearing on Wednesday as she defended the justice department’s handling of files related to Jeffrey Epstein.
Democrats pounded Bondi with questions about the way the department has complied with a law last year mandating the complete release of the files with specific and limited room for redactions. Since releasing the documents after the statutory deadline, the justice department has come under intense scrutiny both for releasing the names of survivors and redacting, without explanation, the names of people who may have committed crimes.
Bondi avoided addressing the questions about the way the department has handled the files. After being pressed by the representative Pramila Jayapal of Washington, Bondi also declined to turn around from her seat at the hearing table and apologize to Epstein victims who were in the hearing room. “I’m not going to get in the gutter with this woman. She’s doing theatrics,” Bondi said.
Bondi also sparred heavily with Jamie Raskin of Maryland, the top Democrat on the committee, as he sought to prevent the attorney general from using long meandering answers to eat up the five minutes members are allotted to ask questions. When Raskin said he had warned Bondi about eating up time at the outset of the hearing, Bondi replied by yelling: “You don’t tell me anything.
“You’re a washed-up loser lawyer. You’re not even a lawyer,” she said to Raskin.
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The justice department has struggled with the redactions in the millions of documents it has released, at times taking documents down from its website that should not have been released and at others removing redactions. Zoe Lofgren, a California Democrat, pressed Bondi on the overly broad redactions on Wednesday, saying the justice department had lost credibility.
“I find it interesting that she keeps going after President Trump, the greatest president in American history,” Bondi said. The attorney general and the justice department have typically kept themselves at arm’s length from the president and the White House to avoid the perception of political interference in law enforcement – a norm that has been shattered by Trump.
“If they could maintain their composure, this isn’t a circus, this is a hearing. I find it interesting she keeps going after Donald Trump, she doesn’t say how much money she took from Reid Hoffman,” Bondi said. Hoffman, the co-founder of LinkedIn has said he knew Epstein because of fundraising for the Massachusetts Institute of Technology and only met with him professionally six times.
The files have revealed that people close to Trump – including the US commerce secretary, Howard Lutnick; former strategist Steve Bannon; and Elon Musk – all had closer relationships with Epstein than was previously known. None of the men has been charged with wrongdoing in connection to Epstein.
Bondi also had a heated exchange with the California representative Ted Lieu, who asked whether Trump had ever attended a party with underage girls. “This is so ridiculous,” Bondi said. “And they are trying to deflect from all the great things Donald Trump has done. There is no evidence that Donald Trump has committed a crime. Everyone knows that.”
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Lieu responded that he believed that answer amounted to a crime – lying under oath – since Trump’s name appears in many instances in the files. In one message, for example, Epstein said Trump “knew about” the girls, but never got a massage. Michael Reiter, the ex-police chief in Palm Beach, also told the FBI that Trump told him “everyone has known he’s been doing this” as it became clear Epstein was under investigation. Trump’s name also appears in uncorroborated tips. Trump has never been charged with a crime and denies any wrongdoing in connection to Epstein.
“Don’t you ever accuse me of committing a crime,” Bondi yelled back at Lieu.
In a heated exchange with Thomas Massie of Kentucky, a Republican representative who sponsored the law requiring disclosure of the files, Bondi tried to deflect blame away from the Trump administration by accusing Massie of not pressing previous administrations on Epstein. Epstein’s sex trafficking took place over decades.
“This goes over four administrations. You don’t have to go back to Biden. Let’s go back to Obama. Let’s go back to George Bush. This cover-up spans decades, and you are responsible for this portion,” Massie said.
