Rolls-Royce Suspends Dividend, Scraps 2020 Guidance as Virus Hits Civil Aviation
April 06 2020 - 2:51AM
Dow Jones News
By Jaime Llinares Taboada
Rolls-Royce Holdings PLC on Monday suspended its 2019 final
dividend and withdrew guidance for 2020, as it expects reduced
revenue from its civil aerospace business due to the coronavirus
pandemic.
The engineering company said that it won't pay the 7.1 pence a
share dividend "in light of the uncertain situation."
The group said that widebody flying hours fell around 25% in the
first quarter, 50% in March, and were expected to plunge further in
April. Therefore Rolls-Royce expects reduced revenue from engine
delivery, and maintenance, repair and overhaul.
The company noted that its defense performance remains in line
with expectations, with no material impacts from the pandemic over
the first quarter.
Rolls-Royce said that it is implementing cash-saving
measures--in addition to the dividend suspension--which will save
some 750 million pounds ($919 million) in 2020. Those include
halting noncritical capital expenditure projects and reducing
salary costs by at least 10% this year.
The U.K. company added that it has secured a GBP1.5 billion
loan, increasing overall liquidity to GBP6.7 billion.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
April 06, 2020 02:36 ET (06:36 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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