LONDON (Reuters) – British engine maker Rolls-Royce fell to a worse-than-expected loss of £ 4 billion ($ 5.6 billion) in 2020 when the pandemic disrupted flights, but maintained that it would shoot through less money this year.
The Rolls model of charging airlines for the number of hours their engines flew meant that much of their revenue dried up last year when stop traveling. In 2020, he received a total of £ 7.3 billion in debt and equity to help him survive.
Cash inflows of 4.2 billion pounds last year were in line with analysts’ expectations, with Rolls reduced this year’s lead to 2 billion pounds, turning positive in the second half when travel is expected to construction. Rolls ’civil aerospace arm makes up just over half of a group’s revenue in a typical year.
On a pretax basis, Rolls posted a loss of £ 4 billion, worse than analysts’ loss of £ 3.1 billion.
Nevertheless, the company said Thursday that its liquidity position was strong and that it could handle it even in adverse conditions.
His shares opened 2.6% at 116 pence.
After taking in £ 5.3 billion of debt last year, Rolls plans to repair its balance by selling 2 billion pounds of assets, the main part of which is Spanish-based ITP, which is currently on the block.
“Our planned sale of ITP Aero is progressing well with ongoing discussions with a number of customers,” Rolls said.
But their asset sale plan escalated into trouble this week when Norway suspended the sale of 150 million euros of Norwegian Rolls unit, Bergen Engines, for security reasons.
Jefferies analyst Sandy Morris said Rolls had “a lot to do” but it was possible. “The potential to reach net debt by the end of 2023 is alive,” he said.
Rolls cash flow development is dependent on airlines flying 55% of 2019 levels in 2021. The company said it expects travel to improve gradually this year, accelerating in the second half as vaccination programs progress.
Tightening travel restrictions tightening early this year, the company warned in January that its 2021 cash burn would be worse than previously expected.
Reporting by Sarah Young. Edited by Guy Faulconbridge and Mark Potter