Rolls-Royce is looking to offload ITP Aero as part of a £2 billion disposal process by the embattled company, which reported an operating loss of £1.7 billion in H1, including one off charges of £1.2 billion in its civil aerospace division linked to COVID 19.
“We have identified a number of potential disposals that are expected to generate proceeds of more than £2 billion, including ITP Aero and a number of other assets. Furthermore, 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,” said chief executive Warren East.
“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. These actions will significantly reduce our cost base, which combined with recovery in power systems and continued resilience in defence, will help us to deliver significantly improved returns as the world recovers from the pandemic,” he added.
The company recorded a £5.4 billion pre-tax loss in H1, made-up of impairment charges, restructuring costs and a £2.6 billion from its FX hedging programme. Revenues dropped a quarter to £5.8 billion and, at an underlying level, the operating loss of £1.7 billion, compared to a profit of £203 million in the same period in 2019.
Rolls-Royce £1.8 billion operating loss broke-down into £1.1 billion from impairments and write offs and £366 million restructuring charges partly offset by a £498million exceptional credit on the Trent 1000 programme.
It currently has liquidity of £6.1 billion made-up of comprising £4.2 billion of cash and £1.9 billion undrawn revolving credit facility. An additional £2 billion undrawn term loan announced in July and finalised in August.
During H1 Rolls-Royce delivered £350m delivered of its 2020 £1 billion cost saving target, while restructuring of the firm’s civil aerospace division will result in 4000 lay-offs by August 27.