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Rolls-Royce reported a record loss before tax of £4.6 billion ($5.7 billion) for 2016.

However, once one-off costs have been stripped out, the jet engine maker’s underlying profit was better than many experts had predicted.

Rolls-Royce agreed to pay £671 million ($838 million) to settle corruption cases with UK and US authorities and it has written off £4.4 billion ($5.5 billion) from currency related contracts.

Like many international businesses, Rolls-Royce usually “hedges” its bets to protect itself from fluctuating currency markets.

Most international aerospace contracts are priced in dollars, but, as a UK-based company, much of Rolls-Royce’s costs are in pounds.

It takes out long-term currency trades. These were designed to protect the firm against what seemed the most likely risk- the fall in the dollar – and many of them were put in place before the EU referendum was even announced.

Since the Brexit vote, the pound has fallen sharply against the US dollar, which has led to the accounting loss.

Rolls-Royce has apologized “unreservedly” for the corruption cases, which spanned 25 years, and involved illegally using local middlemen and paying bribes to win deals in Indonesia, Thailand, China and Russia.



Rolls-Royce has announced a $2.7 billion deal with Norwegian Air Shuttle.

The company will manufacture and service Boeing 787 Dreamliner engines for the low-cost airline.

Rolls-Royce will provide its Trent 1000 engines for 19 new Dreamliners.

The February 1 deal is some welcome positive news for Rolls-Royce, which has seen its share price tumble by more than a third over the last year.Rolls Royce deal with Norwegian

Rolls-Royce is in the middle of a shake-up under new chief executive Warren East.

Warren East has changed senior management at Rolls-Royce and changed the structure of the company in an attempt to make it more transparent.

The company’s reorganization was a response to a series of profit warnings.

Under the deal with Norwegian, Rolls-Royce will provide its TotalCare service contracts for the new aircraft, as well as for the engines on 11 other 787 aircraft leased by Norwegian.

Norwegian has options to buy 10 more Dreamliners, which would also be powered by Rolls-Royce engines.