Rolls-Royce cuts dividends

London – Rolls-Royce Holdings reduced shareholder payments for the first time in almost 25 years and said it will need to deepen cuts amid sluggish sales of marine turbines and slumping demand for older wide-body jets.

The engine-maker’s full-year dividend will fall to 16.4 pence from 23.1 pence for 2014, London-based Rolls-Royce said Friday. The company maintained its outlook, after six profit warnings in two years. Underlying profit for last year fell 12 percent at constant exchange rates to 1.43 billion pounds ($2.07 billion), while sales fell 1 percent to 13.4 billion pounds.

The first cut to Rolls-Royce’s annual dividend since 1992 helps Rolls-Royce preserve cash and protect its credit rating. Restructuring charges this year may reach 100 million pounds, CEO Warren East said, adding that “further reductions” will be necessary after already lopping 20 percent off the top two tiers of management.

The reduced payout places the engineer alongside UK companies including grocers Tesco and J Sainsbury and platinum-miner Anglo American that have slashed dividends.

Read also: Rolls-Royce powers into Africa

“Despite steady market conditions for most of our businesses it will be a challenging year as we start to transition products and sustain investment in Civil Aerospace and tackle weak offshore markets in Marine,” East said in the release.

Rolls-Royce has been plunged into crisis as the tumbling oil price undermines sales of engines it makes for specialist offshore vessels just as demand for corporate and regional jets slumps and some of the bigger planes it powers reach retirement age.

Rolls-Royce’s pretax profit for 2015 was within a range of 1.325 billion pounds to 1.475 billion pounds forecast in November. Analysts had predicated earnings of 1.27 billion pounds, the average of 25 estimates compiled by Bloomberg.

Rolls’s share price has fallen 7.8 percent this year and 39 percent since East took over in July, reducing the company’s market value to 9.75 billion pounds.