Rolls-Royce reports record loss of over 7 bln USD due to pandemic

LONDON, Aug. 27 (Xinhua) -- Engineering giant Rolls-Royce has reported a record pre-tax loss of 5.37 billion pounds (7.1 billion U.S. dollars) for the first half of 2020, as the raging COVID-19 pandemic slows air transport recovery.

The producer of jet engines powering Airbus and Boeing aircraft has been hit hard by the pandemic, which has grounded passenger planes worldwide.

"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," chief executive Warren East wrote in the company's earnings release.

"We have responded rapidly to increase our liquidity, with 6.1 billion pounds at the end of H1 and a further 2.0-billion-pounds term loan agreed in H2, to help weather the continued uncertainty around the timing and shape of the recovery in the civil aviation sector," East added.

According to BBC News, the company had planned to deliver up to 500 jet engines this year but only managed half that due to the pandemic.

East was quoted as saying he did not expect demand to recover to late 2019 levels until 2025.

Amid the dire economic situation due to the COVID-19 impact, the company has carried out cost-cutting exercises to weather the downturn, including slashing its global workforce and closing factories.

On Wednesday, it confirmed plans to close factories in the British counties of Nottinghamshire and Lancashire, BBC News reported. In May, it cut 9,000 jobs, accounting for around 17 percent of its global workforce.