Aston Martin swings to third-quarter loss
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 dropped 16% to 1,497 cars in the three months to the end of September as demand in Britain fell 22%, the wider Europe, Middle East and Africa area dropped 17% and in Asia volumes fell by a third.
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 posted a £13.5 million loss in the three months to the end of September, but said it still expected to meet market expectations of core earnings at around £203 million ($261 million).
But Aston has suffered since its flotation last October where shares launched at £19 ($24.50) before dropping for months and languishing at between £4 and £5 for the last few weeks.
They recovered slightly yesterday, up 9% to 453 pence at 0831 GMT.
Earlier this year, the company announced it was raising $150 million in debt at a 12% interest rate to bolster its balance sheet ahead of the launch of the DBX.
Aston said its net interest expense guidance for 2019 now stood at around £83 million, 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 AG, 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.