Rolls-Royce says its pre-tax loss widened to £2.91 billion in 2020

Rolls-Royce Holdings plc (LON: RR) said on Thursday that its pre-tax loss widened in 2020 amidst the COVID-19 pandemic that weighed on its revenue. The company also warned that the ongoing health emergency makes it harder to predict future performance with confidence at the moment.

Rolls-Royce shares jumped roughly 4% in premarket trading on Thursday but lost almost half of the intraday gain on market open. Including the price action, the stock is now exchanging hands at £1.14 per share. In comparison, Rolls-Royce had started the year 2021 at a per-share price of £1.03. The price action should come in handy if you are interested in investing in the stock market.

Rolls-Royce reports £11.82 billion of revenue

Rolls-Royce reported £2.91 billion of pre-tax loss in 2020. In the previous year, its pre-tax loss was capped at a much lower £891 million. Underlying operating loss, the British multinational added, printed at £2.0 billion last year, compared to £808 million in 2019.

The aerospace and defence company attributed its dovish performance to £1.3 billion of non-recurring pandemic-related charges. Customer provisions and lossmaking contracts, Rolls-Royce said, also contributed to its bearish stance in 2020.

According to the London-based firm, it generated £11.82 billion of revenue last year – a decline from £16.59 billion in 2019. In separate news from the United Kingdom, Royal Dutch Shell named Andrew Mackenzie (former CEO of BHP) as its new chairman on Thursday.

CEO Warren East’s comments on Thursday

Chief Executive Warren East commented on the financial update on Thursday and said:

“We continue to invest in developing market-leading technology and low carbon opportunities in all our end markets, to create value for our stakeholders and ensure we are well-positioned to take advantage of the transition to a lower-carbon economy and growing demand for more sustainable power solutions.”

The manufacturer’s annual report comes a month after it named Panos Kakoullis as its new Chief Financial Officer, who was entrusted with a task to strategize for cost-cutting and simplification in a bid to cushion the economic blow from the ongoing Coronavirus crisis. Kakoullis had previously worked at Deloitte as the head of audit.

Rolls-Royce performed largely downbeat in the stock market last year with an annual decline of more than 50%. At the time of writing, the British multinational aerospace and defence company has a market cap of £9.59 billion.