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Rolls Royce has said its performance in 2020 has been 'significantly affected by the COVID-19 pandemic' as it reports a fall in revenue to £11.8 billion.
The underlying revenue of £11.8 billion reflected lower activity and included a £1.1 billion revenue impact from Civil Aerospace LTSA contract accounting catch-ups.
The underlying operating loss of £2 billion included £1.3bn of one-off charges largely due to COVID-19 comprising charges for LTSA catch-ups, contracts that have become loss-making in the year and customer provisions.
In a statement, the company said: 'In May 2020 we launched a major restructuring programme to fundamentally re-size the cost base and capital requirements of our Civil Aerospace business. In total we expect the restructuring to lead to the reduction of at least 9,000 roles by the end of 2022, most of which are in Civil Aerospace.
'By the end of the year, approximately 7,000 permanent and contractor roles had been removed with a significant proportion achieved through voluntary severance and natural attrition. Through these role reductions and a continued focus on costs, we expect to reduce our operating costs and capital spend by £1.3bn versus 2019 levels, with full run-rate savings realised by the end of 2022.'
It added that in 2020, $500 million of bonds matured and Rolls Royce secured £7.3 billion of additional debt and equity funding to strengthen its liquidity.
'In addition, in March 2021 we secured approvals for a £1 billion increase, which we intend to leave undrawn, to the existing £2 billion term-loan facility supported by an 80% guarantee from UK Export Finance. We are targeting at least £2 billion from disposals by early 2022 and have already announced agreements to sell our Civil Nuclear Instrumentation and Control and Bergen Engines businesses,' the company said.
It expects the proceeds from the rights issue in 2020, together with business disposals and cash generated from operations over the next few years, to help it to return to a net cash position in the medium term.
At 8:57am: (LON:RR.) RollsRoyce Holdings PLC share price was 0p at 93.7p