By Catherine Reynolds
Investing.com -- Rolls-Royce (OTC:RYCEY) shares fell by 3.7% on Thursday as the aero engine maker warned that the pace of recovery from the ongoing challenges of the Covid pandemic remains uneven.
The company said its restructuring programme is running ahead of plan, allowing it to generate free cash flow in the third quarter and putting it on track to beat its forecast of net cash outflows of 2 billion pounds ($2.6 billion) for the full year. It expects to have cut more than 8,500 jobs by the end of the year, and to hit its 1.3 billion-pound savings target by the end of 2022.
The improvement to 2021 is, however, due partly to shifting 300 million pounds of liabilities into next year, in line with deferred deliveries of aircraft using Rolls-Royce engines.
The company said its engine flying hours are currently around half of 2019 levels but that large engine flying hours were recovering as key travel corridors, especially transatlantic routes, reopened.
In civil aerospace, installed engine sales and shop visit activity were both lower than the previous year, while current trading in defense was in line with expectations.
Chief executive of Rolls Royce (LON:RR), Warren East, said the company is delivering on the elements in its control.
"We have achieved good results with our fundamental restructuring program, as we sustainably reduce costs and deliver a leaner and more efficient company," East said.