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Thu 7 Nov 2019 12:14 PM

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Aston Martin profit drops before vital SUV launch

Demand for some of Aston Martin's traditional sports models has stumbled, hurting prices amid uncertainty surrounding Brexit, weakening economies and global trade wars

Aston Martin profit drops before vital SUV launch

Deliveries this year will fall below the previously targeted range of 6,300 to 6,500 autos, according to the company.

Aston Martin Lagonda Global Holdings Plc reported lower third-quarter earnings as the luxury carmaker pins a sales revival to the launch of its first sport-utility vehicle later this month.

The company, the worst performer among Britain’s top 350 stocks in the past year, said reported adjusted operating profit of 13.4 million pounds ($14.8 million), down 51% from a year earlier, according to a statement Thursday.

Key Insights

  • Demand for some of Aston Martin’s traditional sports models has stumbled, hurting prices amid uncertainty surrounding Brexit, weakening economies and global trade wars.
  • Deliveries this year will fall below the previously targeted range of 6,300 to 6,500 autos, according to the company, a setback as it seeks to lift annual output to 14,000 by 2023.
  • Chief Executive Officer Andy Palmer is betting on the coming DBX SUV as the main driver of growth. The car, priced at $190,000, will be launched in Beijing this month with deliveries beginning next year. Palmer said production will start in the second quarter.
  • Analysts have said the company may need to sell new stock to shore up its balance sheet, though a shareholder meeting in June restricted management’s power to do so without approval. It can also only gain access to a further $100 million of financing if it secures 1,400 orders for the DBX by June.

Market Reaction

Aston shares have declined 78% from an initial public offering price of 19 pounds in October last year. That’s shrunk the company’s market value to 952 million pounds.

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