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(Sharecast News) - Rolls-Royce engines flew at 40% of 2019 levels in the first four months of this year as the company said it expected to turn cash-flow positive in the second half as airline travel recovered from the Covid pandemic.
The company, which is paid for the number of hours its engines fly, said revenue was largely driven by demand for cargo flights and the maintenance of key routes with and "broadly unchanged from the run rate at the end of 2020 and consistent with our planning assumptions".
Rolls said it expected to cease cash outflow "at some point during the second half of 2021, as engine flying activity recovers and cost savings are delivered".
It added that future guidance remained sensitive to the timing of engine flying hours recovery and of original equipment concession outflows on already delivered widebody engines.
"While the timing of the recovery remains uncertain, the progress of Covid-19 vaccination programmes in a significant number of countries, particularly the US and UK, is encouraging. Combined with increased testing, vaccination programmes are key enablers of further recovery in international air travel," the company said in a trading statement.
The company has said it plans to offload £2bn worth of assets to help repair its finances and on Thursday said there was an "encouraging range" of parties interested in buying its Spanish unit ITP Aero, which could raise €1.5bn.
Laura Hoy, analyst at Hargreaves Lansdown, said: "It appears the worst is over for Rolls Royce, but we're hesitant to break out the champagne just yet. The uncertainty surrounding the air travel recovery could create some near-term turbulence which will be tricky to navigate given the substantial damage that's already been inflicted."
20 Dec 2023 19:39
LATAM adds 5 more Boeing 787 Dreamliners to order book
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