Cost cuts, asset sales keep Rolls-Royce on target
Jet-engine maker Rolls-Royce looks to be weathering the air travel slump.
The UK giant said Thursday (August 5) that it was on track to hit targets for the year.
Though that will depend in part on raising money from asset sales.
Rolls says it aims to make $2.8 billion from divestments.
Around two-thirds of that could come from a sale of Spanish unit ITP Aero.
Cost-cutting measures should deliver another $1.4 billion in savings this year.
Overall, Rolls swung to a profit of around $427 million for the six months to the end of June.
That's a turnaround from big losses this time last year.
Back then, sales were battered by the slump in air travel, with much of the firm's earnings dependent on how many hours planes fly.
Now chief executive Warren East has shrugged off concern over a slower-than-expected recovery in flights.
He says Rolls has plenty of liquidity to see it through a prolonged downturn.
Over the first half, its bigger engines flew less than half of their pre-crisis hours.
The company hopes that will rise to 55% for the year as a whole.
Rolls-Royce shares were up over 3.5% by lunchtime on Thursday.
