By Jaime Llinares Taboada

Rolls-Royce Holdings PLC on Monday suspended its 2019 final dividend and withdrew guidance for 2020, as it expects reduced revenue from its civil aerospace business due to the coronavirus pandemic.

The engineering company said that it won't pay the 7.1 pence a share dividend "in light of the uncertain situation."

The group said that widebody flying hours fell around 25% in the first quarter, 50% in March, and were expected to plunge further in April. Therefore Rolls-Royce expects reduced revenue from engine delivery, and maintenance, repair and overhaul.

The company noted that its defense performance remains in line with expectations, with no material impacts from the pandemic over the first quarter.

Rolls-Royce said that it is implementing cash-saving measures--in addition to the dividend suspension--which will save some 750 million pounds ($919 million) in 2020. Those include halting noncritical capital expenditure projects and reducing salary costs by at least 10% this year.

The U.K. company added that it has secured a GBP1.5 billion loan, increasing overall liquidity to GBP6.7 billion.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

April 06, 2020 02:36 ET (06:36 GMT)

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