Rolls-Royce plunges to worse than expected loss
Rolls-Royce is hoping for a speedy resumption of flights
Aero engine maker Rolls-Royce plunged to a worse than expected loss in 2020 as the pandemic stopped airlines flying.
The group posted an underlying pre-tax loss of £3.9 billion for last year compared to the £3.1 billion loss forecast by analysts and a £583m profit last time.
Its cash outflow, the measure most watched by analysts, of £4.2 billion was in line with consensus.
The company said it had taken swift action to slash costs by an extra £1bn and aims to save a total of £1.3bn by 2022, including 7,000 job losses in 2020.
A total of 9,000 job cuts are expected, with around two-thirds going in the UK.
During 2020, flying hours on the wide-body airliners supported by Rolls were just 43% of normal. The company predicts demand will rise to only 55% of pre-pandemic levels in 2021.
The company also guided that it would improve this year to an outflow of £2 billion, with the figure turning positive during the second half, though that improvement depends on airlines flying 55% of 2019 levels during 2021.
Chief executive Warren East said: “We have taken decisive actions to enhance our financial resilience and permanently improve our operational efficiency, resulting in a regrettable, but unfortunately very necessary, reduction in the size of our workforce.”