The unprecedented impact of COVID-19 on its civil aerospace division has seen Rolls-Royce report a pre-tax loss of £5.4bn in its half year results.
Reported group revenue meanwhile slumped to £5.8bn, down by a quarter.
The company has launched a major restructuring, in particular of its Civil Aerospace business, to remove at least 9,000 roles with forecast annualised pre-tax savings of over £1.3bn by the end of 2022.
By 27 August, more than 4,000 people had left the business, with at least 5,000 expected by the year-end.
The results follow the announcement that Rolls-Royce is planning to close its aerospace site in Annesley, Nottinghamshire.
Warren East, Chief Executive said: “We ended 2019 with good operational and financial momentum. However, the COVID-19 pandemic has significantly affected our 2020 performance, with an unprecedented impact on the civil aviation sector with flights grounded across the world.
“We have responded rapidly to increase our liquidity, with £6.1bn at the end of H1 and a further £2.0bn term loan agreed in H2, to help weather the continued uncertainty around the timing and shape of the recovery in the civil aviation sector. 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.
“While our actions have helped to secure the Group’s immediate future, we recognise the material uncertainties resulting from COVID-19 and the need to rebuild our balance sheet for the longer term. We have identified a number of potential disposals that are expected to generate proceeds of more than £2bn, 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.”