Rolls-Royce on track to generate cash this year as flights stay steady
Rolls-Royce Holdings PLC (LON:RR.) said demand for cargo flights and the maintenance of key routes had kept flying hours steady in the first four months of 2021.
Large engine flying hours were broadly unchanged from the end of 2020 at around 40% of 2019 levels, it said in a statement ahead of its AGM, though it hoped increased testing and vaccination programmes would boost international air travel later in the year.
Rolls-Royce added that in line with earlier forecasts it still expects to generate cash again at some point during the second half of 2021 as engine flying activity recovers and £1.3bn of its planned cost savings start to come through.
In Power Systems, performance is on track despite the challenging environment, with governmental demand remaining resilient and aftermarket demand increasing while Defence has high levels of backlog cover following a strong period of order intake in recent years.
There has also been a lot of interest in ITP Aero said the statement, which has been earmarked for sale as part of a disposal programme.
Warren East, chief executive, said that Rolls-Royce had faced unprecedented challenges in 2020 with ‘events that were beyond our control’, but this year so far trading had been in line with expectations.
Rolls-Royce posted a loss of nearly £4bn in 2020, cut 7,000 jobs and raised £7.3bn through loans, export credits and a £2bn share issue to keep going as air travel collapsed due to pandemic restrictions.
On a brighter note, East said the company’s pioneering all-electric aircraft Spirit of Innovation will take to the air within weeks.
The propeller-driven plane uses a combination of electrical powertrain and advanced battery system and in theory can fly at more than 300mph, which would be a new world speed record for electric flight.
East added that the engine maker has also tested successfully 100% sustainable aviation fuels in current generation aircraft engines.