Standard & Poor’s has downgraded its credit ratings on Rolls-Royce after the UK engineering group’s chief executive, Warren East, warned earlier this month that its profits would barely pass break-even in the first half of 2016.

The ratings agency has lowered its long-term corporate credit rating for Rolls from A to A- and its short term rating from A1 to A2, citing the company’s increased reliance on performance in the second half of the year.

S&P has also maintained a negative outlook on Rolls, meaning it could be at risk of a further downgrade.

The ratings agency said:

The negative outlook reflects the possibility that we may lower the long-term ratings within the next 12 months if we expect Rolls-Royce’s profits, cash flow, and leverage metrics to be weaker than we anticipate for 2016.

It has been a torrid two years for Rolls, which has issued five profit warnings and committed to cutting £1bn costs.

As the FT’s Michael Peel, Peggy Hollinger and Caroline Binham reported earlier this week, a probe by the UK’s Serious Fraud Office into suspected bribery at the company has now spread to Nigeria.

Rolls has said it is co-operating with relevant authorities. “We have made it clear that Rolls-Royce will not tolerate business misconduct of any kind,” it said.

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