July 23, 2020 / 11:31 AM / 20 days ago

Rolls-Royce says no decisions yet on strengthening balance sheet

LONDON (Reuters) - Britain’s Rolls-Royce (RR.L) was still considering all options for bolstering its balance sheet in the wake of the pandemic, CEO Warren East said on Thursday, as he highlighted progress on new technologies to drive future growth.

FILE PHOTO: The logo of Rolls Royce is pictured on an engine of an Airbus A330-800 aircraft after a flight event presentation in Colomiers near Toulouse, France, November 6, 2018. REUTERS/Regis Duvignau

Speaking two weeks after the company said it had burned through 3 billion pounds ($3.81 billion) in the first half of 2020 and was looking to shore up its finances, East said: “No decisions have been made, we are not going to lay out any potential options, we are considering all options.”

East was speaking to reporters by video call instead of at the Farnborough Airshow which was cancelled. He said the company was making progress with greener engines and other sustainable technologies to drive future growth.

Rolls-Royce, which makes engines for large commercial planes such as the Boeing 787 and Airbus 350, said in May it needed to cut 9,000 jobs as the market for flying will be smaller for years to come.

Pressure on budgets during the pandemic has led the company to cut back on its research and development ambitions, said chief technology officer Paul Stein.

The challenge of meeting zero emissions targets in aviation and other industries was a big opportunity for Rolls, said East, who said he believed that the impact of COVID-19 would be to accelerate the decarbonisation of the world’s economy.

Stein highlighted Rolls’s technology in the urban air mobility market, that is electric-powered flying taxis, and the company said it was an area where it was likely to start seeing new revenue streams opening up within the next five years.

Rolls-Royce also has a plan to get mini nuclear plants which it calls “small modular reactors” connected to the power grid by 2029, and has developed hybrid trains which will be in service in Britain shortly.

UltraFan, a new aero-engine which will reduce fuel burn by 10% from current models, will be tested next year, said Stein, providing airlines with a more efficient option.

(This story was refiled to change format of UltraFan engine name in ninth paragraph)

Reporting by Sarah Young and Paul Sandle; Editing by Elaine Hardcastle

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