Rolls-Royce Holdings plc suffered a record loss of 5.4 billion British pounds ($7.13 billion) in the first six months of 2020 as a result of a dive in international aviation demand brought about by the coronavirus pandemic.
Rolls-Royce's main source of income is from aircraft engines. The manufacturer suffered 1.1 billion pounds in sell offs and impairments as well as a 2.5-billion-pound loss on currency-exchange hedging. Restructuring added another 366 million pounds to the bill.
Rolls-Royce said it initially estimated it would build 450 jet engines this year but now expected that to be halved. Demand won't bounce back to pre-crisis figures in the next five years, chief executive officer Warren East said in a BBC interview.
The continuing health crisis has harmed the UK's aero-engine maker's sales this year with a never-before-seen "impact on commercial aviation" as a huge number of planes are mothballed, East said.
Rolls-Royce announced it would sell assets to make at least 2 billion pounds as the company struggles to resuscitate its finances.
Rolls-Royce shares fell 9 percent in pre-market sessions and were last at 237.3 pounds each. The company's stock has fallen more than 60 percent this year. The company has a market capitalization of 4.54 billion pounds.
The Derby-based group is launching the biggest reorganization since its founding and will shut many manufacturing facilities including Annesley in Nottinghamshire and Barnoldswick in Lancashire.
The company said it would lay off 9,000 employees worldwide because of the virus. Two-thirds of the job losses will be in Europe. It said market conditions remained uncertain. Rolls-Royce has around 50,000 workers worldwide and roughly 50 percent are in the UK.
