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Engineering Rolls-Royce, which manufactures jet engines, reported record losses after the coronavirus pandemic added a call for air travel.
The company reported a tax loss of 5.4 billion pounds during the first part of this year.
Chief executive Warren East told the BBC that he hoped the call would return to the grades until the end of 2019 for five years.
On Wednesday, he showed the closure of factories in Nottinghamshire and Lancashire as part of plans to eliminate 3,000 jobs across the UK.
The move is part of a previously announced cost-cutting exercise that will see the company slash its global workforce by a fifth, following the drastic fall in air travel because of the coronavirus outbreak.
Rolls-Royce is in the midst of its biggest restructuring in its history, which will increase the number of sites it owns in the world from 11 to six.
The encounter and testing of wide-body engines, which is currently taking place in 3 world championships, will be consolidated in its main Derby.
Rolls-Royce employs another 50,000 people worldwide, a part of them in the UK.
East told the BBC’s Today show that this year, another 4,500 people from around the world have left the company.
He said Rolls-Royce had planned to deliver up to 500 jet engines this year, but would only manage part of them.
Rolls-Royce has announced plans to sell its Spanish ITP Aero unit and its assets to raise at least 2 billion pounds.
Rolls-Royce does not make money from the sale of engines, but with its use. When planes prevent flying, as they did with the pandemic, their income is reduced to a net level. He responded with a giant cost-cutting program, with 9,000 jobs underway.
Despite these self-help measures, Rolls-Royce still recorded an operational loss of 1.7 billion pounds in the first half. But the big blow came here with the adjustments he was forced to make to his exchange hedging program, which he put in position to protect him from fluctuations in the price of the US dollar.
The collapse of air flights means that it can no longer expect a U.S. dollar revenue giant, so it has prematurely shut down some of its hedging operations. The charge is 2.5 billion pounds. When you charge other restructuring charges, the total loss over the six months is 5.4 billion pounds,
The big question now is when and how Rolls-Royce will consolidate its balance through fundraising. He has earmarked 2 billion pounds of assets for sale, adding ITP Aero in Spain, but that’s probably not enough. The next step will be a rights issue, where existing shareholders pay for more shares at a value below market value. This can generate approximately 2 billion pounds, or about part of the company’s existing market value.
Some analysts say Rolls-Royce will eventually want more, and that government intervention cannot be ruled out.
Rolls-Royce said: “Given the ongoing uncertainty in the civil aviation sector, we continue to compare additional features of our balance sheet to allow us to get out of the pandemic well-placed to capitalize on long-term opportunities in all of our markets. “
These characteristics may come with the promotion of more divisions, refinancing or even mobilizing investors to obtain cash, a matter of rights, but no resolution has yet been taken.
Julie Palmer, wife of Begbies Traynor, said East had been facing “a torrid period” in Rolls-Royce, with the addition of design with the Trent 1000 engine.
But he said managing the current Covid-19 crisis would be “his challenge to date.”
He added that there were now “more disorders to deal with the company” after Rolls-Royce earlier this month said that the speed inspections of some other type of engine, the XWB-84, had uncovered cracks in the compressor blades in a “small number” of examples.
Rolls-Royce said at the time that he hoped the challenge would create “a significant visitor disruption or significant annual cost.”
On his Thursday, Rolls-Royce said leading monetary officer Stephen Daintith had resigned, but would remain in office for now to help an orderly transition.
Mr. Daintith will join online grocery firm Ocado as CFO in November.