The worst of the COVID-19 crisis is over for Rolls-Royce, which its CEO expected Thursday, after the enginemaker fell to its lowest level of $ 4 billion ($ 5.6 billion) for losses 2020 because airline customers stopped flying.
The British company said its cash flow should go down this year, and turn positive in the second half as vaccines begin and passengers return to space.
“The worst is now far behind us,” said Chief Warren East.
But even while that is optimistic, Rolls is well placed to deal with more tensions following an effort to cut costs and raise money, he said.
“Our money laundering is under control … We have enough liquidity to get through this crisis as long as it lasts,” East told reporters.
Rolls’ model of charging airlines for the number of hours their engines flew meant that much of their revenue dried up last year when it stopped. travel, forcing shareholders to claim money and take in £ 5.3 billion of new debt.
Its civilian aerospace arm, which is powered by Airbus A350 and Boeing 787 jets, makes up just over half of a group’s revenue in a typical year.
Cash burns of 4.2 billion pounds last year were in line with analysts ’expectations, and Rolls led a reduction this year to 2 billion pounds.
The company raised 15% of employees in 2020, and identified 2 billion pounds of assets for sale to repair their balance.
HISTORICAL LOSSES
Rolls, founded in 1906 and one of the last hallmarks of a once powerful British manufacturing industry, posted a base loss of £ 4 billion for 2020, worse than analysts’ expectations for a loss of £ 3.1 billion and the largest ever number on a base basis.
Roll shares went up 2% to 115 pence at 0950 GMT. They have lost 41% since the outbreak began about a year ago, but have gained 22% in the last month on hopes of overcoming travel.
Jefferies analyst Sandy Morris said Rolls had “a lot to do” but the “fix” was feasible. “The potential to reach moderate net debt by the end of 2023 is alive,” he said.
Rolls cash flow development this year is dependent on airlines flying 55% of 2019 levels in 2021. More travel is expected later this year as vaccination programs progress. .
The sale of ITP Rolls’ unit in Spain, which is expected to receive the most satisfaction, is progressing well and there are ongoing discussions with a number of potential buyers, he said.
“We are open to approaches from any party with a reliable offer right now. That includes being open, at the very least, to talks with potential Spanish investors or partners. to be there, “East said.
Some of Rolls ‘asset sale plan went into trouble this week when Norway suspended the sale of 150 million euros of Norwegian Rolls’ unit, Bergen Engines, for security reasons.
This story was published from a wire group group with no text changes.