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Rolls-Royce warns of £2bn cash outflow as Covid-19 variants hamper travel
StockMarketWire.com
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Aerospace engineer Rolls-Royce said it expected to record a £2 billion free-cash outflow in 2021 as more contagious variants of Covid-19 spur tighter travel restrictions.
Rolls-Royce said enhanced restrictions were delaying the recovery of long-haul travel over the coming months compared to its prior expectations, impacting cash flows in 2021.
'Continued progress on vaccination programmes is encouraging for the medium-term recovery of air traffic and economic activity,' Rolls-Royce said.
'In the near-term, however, more contagious variants of the virus are creating additional uncertainty.'
The company's cash outflow guidance was based on 2021 widebody engine flying hours at around 55% of 2019 levels, compared to a base case of 70% presented in October.
The outflow was expected to be heavily weighted to the first half, with Rolls-Royce saying it still expected to turn cash-flow positive at some point during the second half.
Rolls-Royce said its restructuring programme remained on track with 7,000 roles removed during 20202, progressing towards a target to remove at least 9,000 roles by the end of 2022.
As for the year just gone by, Rolls-Royce said trading in December was broadly in line with expectations across all business units.
Full-year 2020 free cash outflow was in line with previous guidance, and in-year cash cost savings of more than £1 billion were achieved.
Year-end liquidity was around £9 billion, at the upper end of the previously guided range.
Story provided by StockMarketWire.com
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