Exhibition of the Aston Martin DB11 in the course of the Turin Motor Show 2018.
Stefano Guidi | LightRocket | Getty Images
LONDON – Luxury automotive maker Aston Martin reported widening first-quarter losses on Wednesday as the corporate halted production of its core models ahead of the introduction of a brand new range of vehicles later this 12 months.
Shares fell greater than 12% in early deals in London.
Adjusted loss before tax almost doubled to 110.5 million kilos ($137.8 million), compared with a lack of 57.3 million kilos a 12 months earlier. Analysts had expected a lack of 93 million kilos for the primary quarter, in response to Reuters.
Revenue fell 10% to £267.7m, while net debt rose 20% to £1.04bn. The company’s high debt pile has long been a priority for investors and has led to a pointy decline in Aston Martin’s share price since its listing in 2018.
Analysts at Jefferies noted the “major miss across all metrics,” reporting a 26% decline in volumes.
Aston Martin said on Wednesday that deliveries of 4 recent models in 2024 will deliver “significant growth” within the second half of the 12 months and beyond.
“Our first quarter performance reflects this expected transition period as we have halted production and deliveries of our outgoing core models ahead of ramping up production of the new Vantage, the enhanced DBX707 and our upcoming V12 flagship sports car, which we confirmed today .” “said Chairman Lawrence Stroll.
Stroll added that Aston Martin took a “significant step” to strengthen its balance sheet this quarter by completing a refinancing with improved terms on five-year senior secured notes following a credit upgrade.
“Aston Martin will be uniquely positioned with a fully renewed core model range by the end of the year,” the corporate said in an announcement.
By region, wholesale volumes fell 35% within the Americas, 30% within the UK and 17% in the broader Europe, Middle East and Africa region. Asia Pacific volumes fell 14%.
The company said SUV wholesale sales fell 63% on account of a “temporary volume decline ahead of the recently announced launch of the new DBX707 model.”
Loss of rates of interest
Susannah Streeter, head of cash and markets at Hargreaves Lansdown, said the corporate seemed to be “a victim of the stressful impact of high interest rates”.
“The increased cost of car financing has dampened demand for luxury vehicles, showing that even rich, aspirational buyers are not immune to the current economic headwinds. But the timing of new car launches also leaves much to be desired,” Streeter said via email.
Aston Martin reiterated its full-year goal to grow wholesale volumes within the high single digits and improve gross margins towards its long-standing goal of 40%.
The company is preparing to welcome recent CEO Adrian Hallmark, Bentley’s current boss, in the autumn. Hallmark can be its third recent CEO since 2020.
Aston Martin’s results follow those of the worldwide automaker Stellar on Tuesday, which also reported a sales decline because it prepares to introduce various recent models this 12 months.
