The FTSE 100 engineer said it has seen no sign of recovery in the civil aircraft market and does not expect an improvement before 2022.
Sales in this division fell by 27% in the year to end-December 2020, which was within an expected range, Melrose added.
Excluding aerospace, revenues from the other divisions – automotive, metallurgy, Nortek – rose by 2% with a 9% rise in the final quarter.
Group revenues for the year fell by 20% to £8.77bn, with a loss before tax of £536mln (£106mln profit).
Melrose, which owns UK stalwart , said that since the start of the pandemic it has been running its businesses for cash and that was reflected in a rise in cash generation and net debt reduced to £2.85bn at the year-end.
Because of this financial stability, Melrose added it is resuming dividend payments with a 0.75p final payment and said it hopes to return to progressive rises from here on.
Justin Dowley, chairman, said: “Whilst the COVID-19 crisis has had a major detrimental effect this year, Melrose has generated record cash flows and continued to invest to improve our businesses. All of this positions the group well for a good recovery and strong performance in the future.”
Read More: Melrose PLC posts loss and expects no aerospace recovery in 2021