Rolls-Royce: Civil Aerospace Business Demand Fell in 1st Half
July 09 2020 - 3:12AM
Dow Jones News
By Anthony O. Goriainoff
Rolls-Royce Holdings PLC said Thursday that its Civil Aerospace
business has experienced a significant fall in demand due to the
coronavirus pandemic during the first half, and that it saw a low
double-digit decline in Power Systems revenue.
The U.K. jet-engine maker said that it expects its performance
to improve in the second half, with free cash outflow of around 4
billion pounds ($5.04 billion).
The company said it has made good progress on Trent 1000 fixes,
and that its widebody engine flying hours were down approximately
75% in the second quarter and 50% for the first half.
Rolls-Royce said that its Defense business has remained
resilient, with continued demand from key government customers, and
that its GBP1.0 billion cost mitigation actions for 2020 are on
track, having achieved around GBP300 million in the first half.
The company added that its restructuring is underway, supporting
free cash flow recovery to at least GBP750 million in 2022.
Rolls-Royce said it anticipates a gradual recovery of its end
markets as travel restrictions ease in the coming months, while
acknowledging the elevated level of uncertainty in the industry
outlook.
"We currently forecast widebody engine flying hours to be down
in the region of 55% this year, with more long-haul routes opening
up in the fourth quarter. We continue to plan for about 250
widebody engine deliveries in 2020, based on announced build rates
from our airframer customers," the company said.
The company didn't give any further information on its financing
options. On Friday, the company said it was considering a range of
potential options to strengthen its balance sheet to position
itself in the post-pandemic recovery period. Rolls-Royce added that
its current financial position and liquidity remain strong.
The company previously said it plans to cut 9,000 roles, out of
a global workforce of 52,000, as part of its major
restructuring.
Write to Anthony O. Goriainoff at
anthony.orunagoriainoff@dowjones.com
(END) Dow Jones Newswires
July 09, 2020 02:57 ET (06:57 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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