LONDON: Luxury British carmaker Aston Martin swung to a third-quarter loss yesterday, saying its full-year wholesale volumes would be lower than previously guided after slumping demand in Europe and Asia.
Volumes to dealers fell 16 percent to 1,497 cars in the three months to the end of September as demand in Europe, the Middle East and Africa area dropped 17 percent and Asia was down by a third, hit by weak demand for the company’s Vantage model.
The 106-year firm, famed for being fictional agent James Bond’s brand of choice, is taking action to cut costs and hopes the launch of its first sport utility vehicle, the DBX, at a new factory in Wales, will boost performance next year.
“We’re essentially holding the cost of a complete factory right now without the benefit of the revenues coming in… so from that point of view of course it’s a really important model,” chief executive Andy Palmer told Reuters.
Aston, based in Gaydon near Birmingham, posted a 13.5 million-pound loss in the three months to the end of September, but said it still expects to meet market expectations of core earnings at around 203 million pounds ($261 million).
The global automotive industry has undergone a torrid year, hit by declining sales in China, trade war worries between the world’s two biggest economies, a slump in diesel sales in Europe and the need to invest heavily in electrification.
But Aston has also suffered since its flotation in October last year when shares launched at 19 pounds ($24.50) before dropping for months and languishing at between 4 and 5 pounds for the last few weeks.
Yesterday, however, shares recovered slightly, up 7 percent to 446 pence at 0903 GMT.
Earlier this year, the company announced it was raising $150 million in debt at a 12 percent interest rate to bolster its balance sheet ahead of the launch of the DBX.
Yesterday, Aston said its net interest expense guidance for 2019 now stood at around 83 million pounds, also affected by the impact of unhedged expenses in US dollars, with prior guidance at roughly 70 million pounds.
Aston, which is primarily owned by Italian and Kuwaiti private equity groups, and not part of a wider automotive group, said it could thrive on its own alongside its work with German carmaker Daimler, which has a small stake in the firm.
“Our relationship with Daimler is also important so we’re not completely alone. We obviously have their technology to fall back on,” said Palmer. – Reuters
