Rolls-Royce has revealed record half-year losses due to plunging demand for air travel amid the pandemic as it unveiled plans to sell off parts of its business to raise £2 billion.
The engine maker said the Covid-19 crisis sent it plunging to a £5.4 billion (€6 billion) loss for the first six months of 2020.
It announced plans to offload parts of its business to boost its balance sheet as it battles to strengthen its finances amid an “unprecedented” slump in aviation activity.
The group has earmarked ITP Aero in Spain for sale among other businesses to offload.
It has already axed about 4,000 jobs since May under the biggest ever shake-up of its civil aerospace arm, which will ultimately cost at least 9,000 jobs.
Derby-based Rolls said demand for large engines is set to remain below 2019 levels until 2025 and warned of “material uncertainties” caused by the pandemic that could cast doubts over its future.
Its mammoth half-year loss for the first six months of 2020 compares with losses of £791 million a year earlier. On an underlying basis, the group swung to a £3.2 billion loss from profits of £93 million in the previous 12 months.
Rolls announced in May that 9,000 jobs would be axed globally to adapt to plunging demand amid the pandemic – with at least 5,000 of those now expected to go by the end of 2020 across the UK, Germany, Singapore and other worldwide bases.
It dealt a blow to UK workers on Wednesday, announcing plans to shut its aerospace factory in Annesley, Nottinghamshire, and merge sites in Lancashire.
In light of ongoing uncertainty in the civil aviation sector, we are continuing to assess additional options to strengthen our balance sheet to enable us to emerge from the pandemic well placed to capitalise on the long-term opportunities in all our markets
Chief executive Warren East said: “The Covid-19 pandemic has significantly affected our 2020 performance, with an unprecedented impact on the civil aviation sector with flights grounded across the world.
“We have made significant progress with our restructuring, which includes the largest reorganisation of our civil aerospace business in our history.
“This restructuring has caused us to take difficult decisions resulting in an unfortunate but necessary reduction in roles.”
He added that there would be more action to offset the hit from Covid-19.
“In light of ongoing uncertainty in the civil aviation sector, we are continuing to assess additional options to strengthen our balance sheet to enable us to emerge from the pandemic well placed to capitalise on the long-term opportunities in all our markets,” he said.