Rolls-Royce on Track to Deliver GBP1.0 Billion Cash Savings in 2020; Will Miss Some Expectations
May 07 2020 - 2:59AM
Dow Jones News
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.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
May 07, 2020 02:44 ET (06:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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