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S&P shifts Rolls-Royce view to positive
S&P said it changed its outlook for Rolls-Royce plc to positive from stable and affirmed the BB- ratings on the company and its senior unsecured debt. The 3 (65%) recovery rating on the debt is unchanged.
“Engine flying hours are steadily increasing, supporting growth in Rolls-Royce plc's top line and profitability, and we expect this trend to continue. In addition, Rolls-Royce used the proceeds from the sale of ITP Aero to fully repay its outstanding £2 billion U.K. Export Finance (UKEF)-backed facility, reducing its gross debt,” the agency said in a press release.
S&P said it forecasts Rolls-Royce's free operating cash flow will be slightly negative in 2022, but trending toward neutral, before turning positive next year at £300 million-£500 million.
The positive outlook indicates a possible upgrade in 2023 if the agency sees evidence of strong and sustainable positive free operating cash flow from 2023, S&P said.
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