(Alliance News) - Rolls-Royce Holdings PLC on Thursday backed its full-year outlook as it reported a good start to 2025 despite the uncertainties associated with US trade tariffs.

"We have had a strong start to the year, with all divisions performing well," the London-based aerospace and defence manufacturer said in a trading update for the first quarter ending March 31.

"Demand for our products and services also remains strong across the group," the company added.

Chief Executive Tufan Erginbilgic said tariff increases have created a "degree of uncertainty" for the industry.

"We expect to offset the impact of announced tariffs on our business through the mitigating actions we are taking. We are closely monitoring the potential indirect impact on economic growth and inflation, and will continue to take the necessary actions," he added.

In response, shares in Rolls-Royce were 2.8% higher at 775.40 pence each in London on Thursday. The wider FTSE 100 index was marginally lower.

In Civil Aerospace, Rolls-Royce said large engine flying hours grew to 110% of 2019 levels, with strong aftermarket revenue growth driven by higher shop visit volumes. Time on wing initiatives are progressing to plan, Rolls-Royce said.

In Defence, demand remains robust across our portfolio of products with strong order intake.

In Power Systems, strong revenue growth was supported by increased order intake, with a book-to-bill ratio of 1.5 times, the company said.

Here, revenue growth was led by power generation, it said, driven by continued demand for back-up power generators for data centres.

Rolls-Royce said it is continuing to strengthen its balance sheet, enabled by a more resilient and growing cash delivery.

As a result, the company left 2025 guidance of GBP2.7 billion to GBP2.9 billion of underlying operating profit and GBP2.7 billion to GBP2.9 billion of free cash flow remains unchanged.

In 2024, Rolls-Royce reported underlying operating profit of GBP2.46 billion and free cash flow of GBP2.43 billion.

By Jeremy Cutler, Alliance News reporter

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