The company explained that since 2015 its marine business as a whole has been dragged down by weak demand for commercial’s products and services for the offshore oil and gas market, which “significantly impacted” profitability.
For example, commercial accounted for 75% of total Marine revenues of £1.1bn in 2016 but was entirely responsible for the overall loss of £27m, Naval business having yielded a “small profit” on its 25% share.
In response, commercial’s workforce has already been cut by 30% to 4,200, and the number of sites reduced from 27 to 15, with cost reductions said to be ongoing.
At the same time the business has continued to invest in new technologies and facilities with a view to becoming a leader in the fields of ship intelligence and autonomous vessels –a position achieved with the successful demonstrations of the world’s first remotely operated commercial vessel in Copenhagen harbour last year (pictured).
“This is the right time to be evaluating the strategic options for our commercial marine operation,” says Rolls-Royce chief executive Warren East. “The team there has responded admirably to a significant downturn in the offshore oil and gas market to reduce its cost base.
“At the same time, we have carved out an industry-leading position in ship intelligence and autonomous shipping and it is only right that we consider whether its future may be better served under new ownership.”
Rolls-Royce said that whatever the outcome of the strategic review naval marine business will be retained, integrated into the group’s new simplified structure of three core businesses - defence, power systems and civil aerospace.