Jaguar Land Rover returned to profit after improved availability of semiconductors boosted output of high-end new models.
The British luxury carmaker reported profit before tax of £265m (R5.6bn) for the three months ending in December, compared with a £9m (R190.6m) shortfall a year earlier, Indian parent Tata Motors said on Wednesday. The gains were due to sales of the new Range Rover and Range Rover Sport models almost doubling, as well as positive currency effects.
“JLR has returned to profit as chip shortages eased in the quarter and production and wholesales increased,” Adrian Mardell, JLR’s interim CEO, said.
The manufacturer has been badly hit by the protracted shortages of semiconductors that have crippled the industry. Earlier this month, JLR said it might miss a target of becoming net debt-free by next year as the supply chain crisis crimped output. The struggles come before a backdrop of record vehicle orders of 215,000, JLR said.
JLR also faces the challenge of executing its EV strategy amid management upheaval. Thierry Bollore, who led the company for less than two years, announced his departure in November, with Mardell taking over in the interim.
JLR said its Solihull plant in the UK will start making fully-electric Jaguar models from 2025 alongside Range Rover models, “heralding an exciting new era of electric carmaking in the UK.”
The nation’s carmaking industry has made only limited headway in the EV transition with battery-building hopeful Britishvolt filing for insolvency this month. During the third quarter, the Jaguar nameplate sold just 14,500 cars.
JLR expects to achieve positive Ebit margin and free cash flow in the fiscal fourth quarter with wholesales of 80,000 units or more. The cost-cutting programme is on track to deliver more than £1bn (R21.1bn) in improvements in the year to help soften inflation. The manufacturer stuck to an expectation of achieving positive cash flow and positive returns for the year.
Tata Motors CFO PB Balaji said he is “cautiously optimistic” as there is still a shortage of semiconductor supplies at JLR.
Overall, JLR’s wholesales in the third quarter jumped 15% from a year earlier to 79,591 vehicles. Wholesale volumes in China were hit by Covid-19 restrictions — which have since been lifted — falling 13% from the previous quarter, with the situation expected to improve.
The result helped parent Tata, which reported net income of 29.6bn rupees (R6.2bn) in the third quarter, compared with a 15.2bn rupee (R3.2bn) loss a year earlier. The Mumbai-based carmaker beat the average analyst estimate of 1.06bn rupees (R223.3m) profit.
Tata Motors is planning to invest $2.2bn (R37.8bn) in electric vehicles over five years with the company’s EV business well funded, Balaji said, when asked whether the company is looking to raise fresh funds.
More stories like this are available on bloomberg.com
JLR swings to profit after new Range Rover model output doubles
Image: Supplied
Jaguar Land Rover returned to profit after improved availability of semiconductors boosted output of high-end new models.
The British luxury carmaker reported profit before tax of £265m (R5.6bn) for the three months ending in December, compared with a £9m (R190.6m) shortfall a year earlier, Indian parent Tata Motors said on Wednesday. The gains were due to sales of the new Range Rover and Range Rover Sport models almost doubling, as well as positive currency effects.
“JLR has returned to profit as chip shortages eased in the quarter and production and wholesales increased,” Adrian Mardell, JLR’s interim CEO, said.
The manufacturer has been badly hit by the protracted shortages of semiconductors that have crippled the industry. Earlier this month, JLR said it might miss a target of becoming net debt-free by next year as the supply chain crisis crimped output. The struggles come before a backdrop of record vehicle orders of 215,000, JLR said.
JLR also faces the challenge of executing its EV strategy amid management upheaval. Thierry Bollore, who led the company for less than two years, announced his departure in November, with Mardell taking over in the interim.
JLR said its Solihull plant in the UK will start making fully-electric Jaguar models from 2025 alongside Range Rover models, “heralding an exciting new era of electric carmaking in the UK.”
The nation’s carmaking industry has made only limited headway in the EV transition with battery-building hopeful Britishvolt filing for insolvency this month. During the third quarter, the Jaguar nameplate sold just 14,500 cars.
JLR expects to achieve positive Ebit margin and free cash flow in the fiscal fourth quarter with wholesales of 80,000 units or more. The cost-cutting programme is on track to deliver more than £1bn (R21.1bn) in improvements in the year to help soften inflation. The manufacturer stuck to an expectation of achieving positive cash flow and positive returns for the year.
Tata Motors CFO PB Balaji said he is “cautiously optimistic” as there is still a shortage of semiconductor supplies at JLR.
Overall, JLR’s wholesales in the third quarter jumped 15% from a year earlier to 79,591 vehicles. Wholesale volumes in China were hit by Covid-19 restrictions — which have since been lifted — falling 13% from the previous quarter, with the situation expected to improve.
The result helped parent Tata, which reported net income of 29.6bn rupees (R6.2bn) in the third quarter, compared with a 15.2bn rupee (R3.2bn) loss a year earlier. The Mumbai-based carmaker beat the average analyst estimate of 1.06bn rupees (R223.3m) profit.
Tata Motors is planning to invest $2.2bn (R37.8bn) in electric vehicles over five years with the company’s EV business well funded, Balaji said, when asked whether the company is looking to raise fresh funds.
More stories like this are available on bloomberg.com
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