Stellantis raises profit margin target for the year after strong first half results

MILAN, Aug. 3 (Reuters) – Automaker Stellantis said on Tuesday it was increasing its annual adjusted operating profit margin target to around 10% after strong first-half financial results, which included record margins in North America. North.

The new target compares to a previous forecast of between 5.5% and 7.5%.

The forecast increase is based on the assumption that there will be no further deterioration in the industry-wide global semiconductor shortage and no further shutdowns in Europe and the United States due to the COVID-19 pandemic.

CFO Richard Palmer said the world’s fourth largest automaker did not see an improvement in the chip supply situation until the last quarter of this year, with an expected total production loss of around $ 1. 4 million vehicles in 2021.

He added that a surge in commodity prices also remains a challenge, as its impact is expected to be higher in the second half of this year compared to the first six months.

In the January-June period, pro forma adjusted profit before interest and taxes (EBIT) stood at 8.622 billion euros ($ 10.24 billion) from 752 million a year earlier, beating expectations analysts of 5.938 billion euros in a Reuters poll.

The group’s EBIT margin stood at 11.4% in the first half, with North America posting a record 16.1%.

In the same period, Stellantis, born in January from the merger of the French PSA and the Italian-American group Fiat Chrysler, posted a pro forma negative industrial free cash flow of 1.163 billion euros.

($ 1 = € 0.8422)

Reporting by Giulio Piovaccari; edited by Agnieszka Flak

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