Aston Martin DB11 exhibition during the 2018 Turin Motor Show.
Stefano Guidi | LightRocket | beautiful images
LONDON – Luxury car manufacturer Aston Martin on Wednesday reported a widening loss in the first quarter as the company discontinued production of core models ahead of launching a new range of vehicles later this year.
Shares fell more than 12% in early trading in London.
Adjusted pre-tax losses nearly doubled to 110.5 million pounds ($137.8 million) from a loss of 57.3 million pounds the year before. According to Reuters, analysts had predicted a first-quarter loss of 93 million pounds.
Revenue fell 10% to £267.7m, while net debt rose 20% to £1.04bn. The company’s huge debt has been a long-term concern for investors, which has contributed to Aston Martin’s share price plummeting since its listing in 2018.
Analysts at Jefferies noted a “huge miss on metrics,” marking a 26% drop in volume.
Aston Martin said Wednesday that deliveries of four new models in 2024 will generate “significant growth” in the second half of the year and beyond.
“Our first quarter operating results reflect this expected transition period, as we cease production and distribution of upcoming core models before ramping up production of the new Vantage, The upgraded DBX707 and our upcoming V12 flagship sports car which we have confirmed today.” “, said Chairman Lawrence Stroll.
Stroll added that Aston Martin took an “important step” in strengthening its balance sheet during the quarter, as it completed a refinancing with improved terms on covered notes. 5-year term guarantee after credit rating upgrade.
“Aston Martin will be uniquely positioned with its core model range fully revived later this year,” the company said in a statement.
By region, wholesale volumes fell 35% in the Americas, 30% in the UK and 17% in the Europe, Middle East and Africa region. Asia-Pacific volumes were down 14%.
According to the company, SUV sales were down 63% due to “a shift in volume declines ahead of the launch of the recently announced new model DBX707”.
The disaster of interest rates
Susannah Streeter, head of currency and markets at Hargreaves Lansdown, said that the company appeared to be “a victim of the devastating impact of high interest rates”.
“Rising auto financing costs have reduced demand for luxury vehicles, showing that even wealthy shoppers are not immune to the current economic headwinds,” Streeter said via email. in. But the timing of the new car launch also leaves something to be desired.”
Aston Martin reiterated its full-year target of single-digit percentage wholesale volume growth and gross margin improvement towards its long-term target of 40%.
The company is preparing to welcome new executive director Adrian Hallmark, Bentley’s current leader, in the fall. Hallmark will be the third new CEO since 2020.
Aston Martin’s results closely followed those of the global car company Stellantis on Tuesday, also reported slowing sales as the company prepares to launch a series of new car models this year.
