LONDON (dpa-AFX) - Rolls Royce Holdings plc. (RYCEF.PK, RR.L, RYCEY.PK) Monday said it is withdrawing previously announced financial guidance for 2020 due to disruption from coronavirus or COVID-19 crisis.
Further, the Board has decided to no longer recommend a final shareholder payment of 7.1 pence per share in respect of 2019.
In its trading update, the company said the primary impact from COVID-19 has been on engine flying hours in Civil Aerospace business. Widebody flying hours fell by approximately 25 percent in the first quarter, compared to the prior year. It fell approximately 50 percent in March, with an expected further deterioration in April and beyond as airlines have grounded an increasing proportion of their fleets over the last few weeks.
Defence activity remains in line with expectations, with no material operational or financial disruption as a result of COVID-19 in the first quarter.
The company said it is executing various mitigations to reduce cash expenditure which will have a cash flow benefit of at least 750 million pounds in 2020 in addition to ongoing transformation plans.
The company is reducing salary costs across global workforce by at least 10 percent in 2020, subject to local legal requirements. Salaries for senior managers and Executive Team will be reduced by 20 percent for the rest of 2020, comprising a reduction of 10 percent and a deferral of 10 percent, with an additional bonus deferral for the CFO and CEO.
There will also be a corresponding reduction in fees for Non-Executive Directors of the Board for the remainder of the year.
The company's Annual General Meeting is scheduled for May 7.
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