MILAN (Reuters) – Carmaker Stellantis said on Tuesday it was raising its full-year target on its adjusted operating profit margin to around 10% after strong financial results in the first half, which included record margins in North America.
The new target compares with a previous forecast of between 5.5%-7.5%.
The guidance increase relies on the assumption of no further deterioration in the global semiconductor shortage which had been affecting the whole industry and of no further lockdowns in Europe and in the United States due to the COVID-19 pandemic.
Chief Financial Officer Richard Palmer said the world’s fourth-largest carmaker did not see an improvement in the chip supply situation before the final quarter of this year, with a total projected production loss of around 1.4 million vehicles in 2021.
He added that a spike in raw material prices also remained a challenge, as its impact was expected to be higher in the second half of this year versus the first six months.
In the January-June period pro-forma adjusted earnings before interest and tax (EBIT) amounted to 8.622 billion euros ($10.24 billion) versus 752 million a year earlier, topping analyst expectations of 5.938 billion euros in a Reuters poll.
The group’s EBIT margin stood at 11.4% in the first six months, with North America posting a record 16.1%.
In the same period Stellantis, which was formed in January by the merger of France’s PSA and Italian-American group Fiat Chrysler, posted a negative pro-forma industrial free cash flow of 1.163 billion euros.
($1 = 0.8422 euros)
(Reporting by Giulio Piovaccari; editing by Agnieszka Flak)
