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		</div><p>Engine maker Rolls-Royce has reported its largest ever loss and one of the biggest in UK corporate history after being hit by the pound&#8217;s plunge and a corruption scandal.</p>
<p>The blue chip giant slumped into the red with a pre-tax loss of £4.64billion (€5.5bn) for 2016 after a £4.4billion (€5.2bn) writedown caused by the collapse of the pound since the Brexit vote, as well as a £671million (€791m) penalty to settle bribery allegations.</p>
<p>On an underlying basis, it reported pre-tax profits of £813million (€958m) &#8211; nearly half the £1.4billion (€1.7bn) recorded in 2015.</p>
<p>Rolls said it was on track with efforts to slash costs and is expecting a &#8220;modest&#8221; performance improvement in 2017. But chief executive Warren East warned there was still much to do in turning the business around.<br />
He said: &#8220;2017 remains a challenging year and we have lots of operational improvements to do.&#8221;</p>
<p>Shares in the FTSE 100 heavyweight fell 3% after the scale of its losses was revealed, although its underlying performance was better than most analysts had expected.</p>
<p>The huge annual loss follows a tough past two years for Rolls after a string of profit warnings and last month&#8217;s corruption fine to settle a case brought by the Serious Fraud Office and authorities in the US and Brazil.</p>
<p>Sir Brian Leveson said on handing down his written judgment in January that the long-running probe revealed &#8221;the most serious breaches of the criminal law in the areas of bribery and corruption&#8221;.</p>
<p>Rolls will pay the £671 million fine over five years, with a £293 million payment this year, but has taken the full cost as an impairment charge against 2016 profits.</p>
<p>The pound&#8217;s recent hefty falls in value have added to its woes, forcing the group to write down the value its currency hedges.</p>
<p>Sterling has fallen by almost a fifth against the dollar since the Brexit vote.<br />
This helped push it deep into the red against a bottom-line profit of £160 million in 2015.</p>
<p>Rolls chief executive Warren East, who has been leading an overhaul since taking the helm in 2015, said it was &#8220;now time to look further ahead&#8221;.</p>
<p>He added: &#8220;With my new team in place, our focus is turning towards the group&#8217;s long-term goals.&#8221;<br />
The group is on track to make annual savings of around £200 million by the end of the year.</p>
<p>Mr East has been slashing jobs and axing layers of management, confirming that 700 management positions were cut in 2016.</p>
<p>The group said in December that it was slashing another 800 jobs worldwide across its embattled marine business.</p>
<p>Results showed the marine division tumbled to a £27 million loss in 2016.<br />
Underlying profits were lower across all its other divisions, with group-wide underlying revenues dropping 2% to £13.8 billion.</p>
<p>Rolls announced its first dividend cut since 1992 a year ago to maintain balance sheet health amid plunging profits.</p>
<p>In its latest set of results, it confirmed it would pay a 7.1p-a-share final dividend or 11.7p a share for the full year, down from 16.4p for 2015.</p>
<p>George Salmon, equity analyst at Hargreaves Lansdown, said aside from the record Rolls loss, its underlying result showed &#8220;things are not as bad as they could have been&#8221;.</p>
<p>He said the overhaul will start to bear fruit, while the weak pound will begin acting as a headwind on overseas earnings, but warned &#8220;a recovery is unlikely to happen overnight&#8221;.</p>
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