Rolls-Royce Holdings suffered a record half-year loss after the coronavirus crisis grounded jetliner fleets, and said it plans to sell assets to build up cash that can help it weather the downturn.
A charge swelled the pre-tax loss of £5.4 billion (S $ 9.74 billion) for curbing currency hedges as sales shrink, Rolls-Royce said on Thursday (Aug 27) with a writedown of the value of its main jet-engine arm.
The company said it wants to raise at lease £2 billion from disposals within 18 months, identifying Spanish unit ITP Aero, a maker of aircraft and industrial engines and parts, as the asset most likely to be offloaded.
Rolls-Royce is also closing sites and cutting jobs as it grapples with a slump that's expected to depress demand for the wide-body engines in which it specializes for years to come. Chief executive officer Warren East, who had already warned that the airliner-engines business could emerge a third smaller, said 4,000 posts had been eliminated so far out of a potential 9,000 that may need to go.
"We have made significant progress with our restructuring, which includes the largest reorganization of our civil aerospace business in our history," Mr. East said in a statement, adding that the "difficult decisions" will significantly reduce the group's cost base.
Rolls-Royce fell as much as 7.7 percent and traded 6.5 percent lower as of 8.06 am in London, taking the stock's decline this year to 65 percent and cutting its market value to 4.57 billion pounds.