(Adds detail, background)
LONDON, March 11 (Reuters) - British engine-maker
Rolls-Royce plunged to a worse than expected 4 billion pound
($5.58 billion) loss in 2020 as the pandemic stopped airlines
flying, but stuck to its outlook for cash outflow to improve in
2021.
Rolls-Royce's model of charging airlines for the number of
hours its engines fly meant its income dried up last year when
travel stopped. It was forced to raise 5 billion pounds from
shareholders and in loans to buffer against the uncertainty.
Rolls-Royce posted group underlying pre-tax loss of 4
billion pounds for last year compared to the 3.1 billion pound
loss forecast by analysts.
Its cash outflow, the measure most watched by analysts, of
4.2 billion pounds was in line with consensus, and Rolls guided
that it would improve this year to an outflow of 2 billion
pounds, with the figure turning positive during the second half.
That improvement depends on airlines flying 55% of 2019
levels during 2021. Rolls-Royce said its assumption is for
travel to gradually improve this year, accelerating in the
second-half as vaccine programmes progress.
Blaming tightening travel restrictions in the early part of
this year, the company had already warned that its 2021 cash
outflow would be worse than previously expected.
($1 = 0.7175 pounds)
(Reporting by Sarah Young; editing by Guy Faulconbridge)
Rolls-Royce (RR.)
