8/13/2019, 10:48 AM (Source: TeleTrader)
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Moody's cuts Rolls-Royce's rating to Baa1

Shares of Rolls-Royce Holdings Plc slumped on Tuesday back near the lowest mark since February 2017 after a downgrade by Moody's Investors Service. The aerospace giant has dropped significantly in the past two weeks amid overall market turbulence but especially after reporting a cash outflow of £429 million for the first six months of 2019, even though it maintained a flow target of £700 million for the year within a range of £100 million more or less.

The rating agency slashed the grade to Baa1 from A3, citing high adjusted leverage and low cash flow generation, and changed the outlook to stable from negative. The said target will be reached with working capital gains, it added and stressed the category is unsustainable and that it may continue next year. The credit appraiser lowered equivalently the senior unsecured euro medium-term notes. Other highlighted risks are costs for the Trent 1000 engine setback, the low number of solutions for widebody airplanes and hurdles for aftermarket profit growth.

The company has reported revenue growth of 5.3% year on year to £7.88 billion, translating to a reduction in net loss of 4.7% to £907 million or 6.9% to £48.02 per diluted share. Rolls-Royce was down 2.48% at 733.56 pence at 10:33 am CET in London.

Baha Breaking News (BBN) / IT