Rolls-Royce to burn through £2bn in 2021
Derby-based manufacturing giant Rolls-Royce says it expects to burn through £2bn in 2021 as the pandemic continues to hit civilian flying hours.
The company said in a trading update this morning that while it continues to try and cut costs across the business, Covid restrictions are delaying the recovery of long-haul travel for longer than it expected.
Rolls said it expects engine hours to come in at round 55% of 2019 levels this year, compared to its previous prediction of 70% last October. It says it expects most of the £2bn will flow out of the company in the first six months of the year and that it expects to be cash flow positive “at some point” during the second half.
A statement from the company said: “With liquidity of approximately £9 billion, we are confident that despite the more challenging near-term market conditions we are well-positioned for the future. We remain focused on completing our restructuring programme and footprint consolidation as well as maintaining cost control and capital discipline.
“During 2020 we removed around 7,000 roles, making good progress towards our target to remove at least 9,000 roles by the end of 2022. This restructuring will be a key enabler of our target to deliver at least £750m of free cash flow (excluding disposals) as early as 2022, contingent on the expected recovery in engine flying hours.”