Published on : Monday, March 15, 2021
Manufacturing giant Rolls Royce recently reported a net loss of £3.9 billion for financial year 2020 as the COVID-19 pandemic took a huge toll on the aviation sector. The British company saw revenue fall from £15.4 billion to £11.7 billion over the year. Rolls Royce has cut 7,000 jobs over the past 12 months and has been forced to raise cash from investors to bolster its finances.
Releasing its results, the firm said it had liquidity of £9 billion on hand, having protected its financial position with £7.3 billion of new debt and equity. The company also launched a programme to raise at least £2 billion from disposals. The Derby-based company expects to burn through another £2 billion cash this year as it continues to restructure the business. Rolls Royce has also warned it may have to slash a further 2,000 jobs.
Warren East, Chief Executive, Rolls Royce said in a statement that the impact of the COVID-19 pandemic on the group was felt most acutely by the civil aerospace business. He mentioned that as a response, immediate actions to address the cost base was undertaken, launching the largest restructuring in the company’s recent history, consolidating the global manufacturing footprint and delivering significant cost reduction measures.
He shared that the company has taken decisive actions to enhance financial resilience and permanently improve operational efficiency, resulting in a regrettable, but unfortunately very necessary, reduction in the size of the workforce. He said that with the support of stakeholders the company successfully secured additional liquidity with a rights issue, bond issuance and further credit facilities put in place during the year.
He also informed that Rolls Royce have made a good start on the programme of disposals and will continue with this in 2021. He also mentioned that the company will continue to invest in developing market-leading technology and low carbon opportunities in all its end markets, to create value for stakeholders and ensure that they are well positioned to take advantage of the transition to a lower carbon economy and growing demand for more sustainable power solutions.