2020 was a terrible year for Rolls-Royce (LSE:RR).
While management had previously expected RR to generate free cash flow (FCF) of at least £1bn, the pandemic changed everything. Due to the coronavirus, the number of flying hours in civil aviation dropped sharply. Management now expects negative FCF of £4.2bn for 2020. Given the cash outflow, Rolls-Royce has had to issue more shares through a rights offering. The company also expects to end 2020 with net debt of between £1.5bn and £2bn when excluding lease liabilities.
With that said, the future could be better than the past.
While 2020 has been terrible, I nevertheless think 2021 will be better thanks to the development and rollout of vaccines. Pfizer’s vaccine has already been approved in both the US and UK and many other vaccine candidates look promising.
With the arrival of a new year, here’s what I think is next for … Read more