Rolls-Royce on Track to Deliver GBP1.0 Billion Cash Savings in 2020; Will Miss Some Expectations

By Joe Hoppe

Rolls-Royce Holdings PLC said Thursday that while cost-cutting actions are making stronger progress than expected, coronavirus-related damage to the civil aerospace industry will cause it to miss some expectations.

The engineering company said actions to safeguard itself against the near-term disruption is making stronger progress than expected, and it is confident that it can deliver up to 1.0 billion pounds ($1.24 billion) in cash savings in 2020.

A smaller commercial aerospace market may take several years to recover, warned Rolls-Royce, adding that Civil Aerospace widebody engine flying hours have been 40% below management views in the first four months of the year. The grounding of fleets around the world leaves Rolls-Royce expecting maintenance, repair and overhaul service volumes to be below levels reported a year prior, and it expects to deliver 250 widebody engines in 2020 against guidance of 450.

Rolls-Royce said it anticipates a significant cash outflow in its second quarter. However, it said its financial position was robust and liquidity remained strong, securing additional revolving credit facilities of GBP1.9 billion. It said it is well-placed to capitalize on long-term potential in the market once the crisis ends.

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(END) Dow Jones Newswires

May 07, 2020 02:44 ET (06:44 GMT)

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