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Rolls-Royce (RR) posts record £5.4bn loss for H1 2020
Rolls-Royce (RR) shares fell 6.96% in early trading on Thursday after the engineering company posted a record pre-tax loss of £5.4bn for the first six months of the year.
The impact of COVID-19 has been devastating for the aviation industry and passenger traffic plummeted by up to 98% amid stringent lockdown measures enforced across Europe in the spring.
Rolls-Royce is the second largest aircraft engine manufacturer in the world, so the impact of the global pandemic has been particularly acute.
It has also had to contend with those issues while continuing major restructuring of its core offerings, a move that will see the number of its global sites cut by almost half to six.
Rolls-Royce posted its latest financial report before the London Stock Exchange opened on Monday.
It said that operating losses for H1 2020 were £1.7bn, but that this ballooned to £5.4bn when restructuring costs and other factors were included.
Rolls-Royce stock has already declined 60% for the year-to-date and there was another 6.96% retreat on Thursday.
Shares were valued at 235.40 GBX at just before 11:30 am BST.
There does not appear to be the potential for an immediate rally either.
Chief executive Warren East admitted that demand in the aviation industry will remain muted for a while yet and that it could take five years for it to fully recover to 2019 levels.
On Wednesday, the London-based company also confirmed plans to cut 3,000 jobs in the UK with the closure of two factories in the Midlands and north-west.
Rolls-Royce also announced on Thursday that CFO Stephen Daintith will be leaving the company after handing in his resignation.
The company added that it was now focused on strengthening its balance sheet so that it can capitalise on long term opportunities.
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