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Aston Martin cuts delivery outlook – Automotive News

by Nov 3, 2022Blog0 comments

Aston Martin said it was still seeing strong demand for its luxury cars, including the DBX SUV, its best-selling model.
Aston Martin said it would deliver fewer vehicles than expected this year due to persistent supply-chain problems.
The company now expects to deliver as few as 6,200 cars, down from an earlier projection of more than 6,600 after parts shortages prevented some 400 autos from being shipped in the third quarter, it said Wednesday.
Aston Martin also reported a worse-than-expected operating loss in the period.
In July, it had forecast an improvement in its finances in the second half of the year, predicting positive free cash flow after burning through tens of millions of pounds in cash.The company’s third-quarter operating loss widened to $67 million pounds from $34 million a year earlier.
“Although these headwinds, which are already improving in Q4, have disrupted our near-term financial performance and modestly impacted our full-year guidance, the medium- and long-term outlook is robust,” Executive Chairman Lawrence Stroll said in a statement.
The sports and luxury automaker has been struggling with a turnaround plan to raise output and lower debt, and has long been suffering from the supply-chain problems that have plagued the industry.
Volkswagen Group last month cut its sales expectations for the year as semiconductor availability remains scarce and logistics continue to pose a challenge. Toyota Motor lowered its production target for the same reasons.
Aston Martin shares fell up to 16.5 percent in London, the steepest intraday drop in more than four months. The shares are down around 81 percent this year.
In September, the manufacturer completed a 654 million pound ($752 million) rights issue with Saudi Arabia’s Public Investment Fund becoming an investor. It also attracted China’s Zhejiang Geely Holding Group, which acquired a 7.6 percent stake. Geely, which owns automaker Volvo and controls Lotus, is considering increasing its stake in Aston Marin over time to foster collaboration, Bloomberg reported last month.
“Aston Martin is facing a huge challenge to reduce its debt level,” said Orwa Mohamad, an analyst at Third Bridge. “This is particularly concerning in a deteriorating macro backdrop. Aston Martin has fantastic cars and a strong brand, but their financial position makes success a real challenge.”
Aston lowered its net debt to $958 million, down from $1 billion at the end of last year, and said it was still seeing strong demand for its luxury cars.
Once touted as a peer to Ferrari, which has seen its valuation soar since a spinoff from Fiat, Aston has suffered a number of setbacks since its 2018 initial public offering. With dwindling cash and rising debt, the manufacturer sought a rescue in 2020 from Canadian billionaire Stroll, who injected cash and forged closer ties with Germany’s Mercedes-Benz Group.
Reuters contributed to this report
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