By Adria Calatayud
Rolls-Royce Holdings PLC said Tuesday that it expects a free cash outflow of around 2 billion pounds ($2.74 billion) this year and warned that more contagious coronavirus variants are creating additional uncertainty.
The British aircraft-engine maker said its cash outflow forecast for 2021 is based on an expectation of widebody engine flying hours at around 55% of 2019, compared with its previously indicated base case of 70% of 2019 levels.
The company said coronavirus-related restrictions are delaying the recovery of long-haul travel compared to its prior expectations, which is placing further pressure on its customers and hurting its own cash flows in 2021.
Rolls-Royce said its free cash outflow this year is forecast to be heavily weighted toward the first half, and that it continues to expect to turn cash-flow positive at some point during the second half.
The company said its December performance matched expectations and that its 2020 free cash outflows were in line with previous guidance. Last month, Rolls-Royce said it expected a cash outflow of GBP4.2 billion for 2020.