The UK government, which made Rolls its preferred bidder for SMR technology, said in a separate statement that publicly-owned Great British Energy-Nuclear will oversee construction of the reactors, which are aimed at providing cheaper and cleaner energy.

Rolls-Royce SMR aims to cut the costs and complexity of building nuclear power stations and is hoping to be profitable by 2030.

"In the UK, where Rolls-Royce SMR was selected in June as the preferred technology provider..., commercial terms remain on track to be finalised later this year," Rolls said in Thursday's trading update.

The government added in its statement that the UK's first small modular reactors will be "smaller and quicker to build than some traditional nuclear power stations" and "are expected to deliver power for the equivalent of around three million homes".

The SMR project is backed by pound2.5-billion ($3.3-billion) investment from Prime Minister Keir Starmer's Labour government.

Energy minister Ed Miliband on Thursday defended the decision to pick the Anglesey site, North Wales, for SMRs after objections by the United States.

"Our job is to stand up for the national interest," Miliband told news station Times Radio.

US ambassador to the UK, Warren Stephens, said his country was "extremely disappointed" after reportedly failing in a bid to have American firm Westinghouse use the site for a larger reactor.

"There are cheaper, faster, and already-approved options to provide clean, safe energy at this same location," he added in a statement posted on X.

It comes as Rolls-Royce benefits from a trade agreement between the UK and United States struck in May, which removes tariffs on Britain's aerospace sector.

The deal places a 10-percent tariff on the import of British goods to the US, and lowers sector-specific levies including on automakers.

Meanwhile heading towards year-end, Rolls-Royce chief executive Tufan Erginbilgic on Thursday said the group was showing "strong performance" in line with the company's expectations.

Rolls-Royce said it is on track to meeting its guidance for full-year underlying operating profit of between pound3.1 billion and pound3.2 billion.

"Rolls-Royce continues to cruise above the clouds, with its third-quarter update showing little sign of turbulence," Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said of the company making engines for larger Airbus and Boeing planes.

"Revenue growth this year is being boosted by the upward trend in engine-flying hours," he added.