Fiat Chrysler Automobiles Dive to a Loss
Fiat Chrysler Automobiles plummeted to a loss of $1.8 billion on Q1 scrapping its full-year earnings forecast on Tuesday. The automaker grapples with a coronavirus crisis that has hammered its production, sales, and stocks.
The Italian-American company has struck a binding merger deal with France’s PSA Group to create the world’s fourth-largest carmaker. It said it remained committed to the tie-up, despite unexpected and unprecedented times.
Together, they continue to push ahead on the various merger workstreams. They remain committed to completing the transaction by the end of this year or early 2021, it added.
FCA said it made a net loss from continuing operations of 1.69 billion euros. That was $1.83 billion in the first quarter compared with a 508 million euro net profit last year.
The company said the pandemic continues to have a significant impact on their operations.
However, FCA still made an operating profit, although 95% lower than a year earlier. The adjusted earnings before interest and tax amounted to 52 million euros.
Fiat Chrysler Automobiles’ Milan-listed shares extended gains in the stock market after the release of results and were up 1.4%.
The automaker said that due to the continued uncertainty related to the coronavirus pandemic, it had withdrawn its full-year guidance. They would update it when it had better visibility of the overall impact of the crisis.
Fiat Chrysler Automobiles Restart Production
In February, the group guided for an increase in adjusted EBIT to more than 7 billion euros this year. Industrial free cash flow was over 2 billion euros.
In the Q1 industrial free cash flow was around minus 5 billion euros. But Fiat Chrysler Automobiles said it had available liquidity of 18.6 billion euros as of March 31. That includes a 6.25 billion revolving credit facility which was fully drawn down in April.
Liquidity further strengthened last month with a new 3.5 billion euro incremental bridge credit facility. This remains fully undrawn.
FCA said they continue to assess all funding options.
Stock trading reports that despite losses, it had revenues of $22 billion. That was 21 billion euros compared to the same period a year ago. It was a drop of 16%, and its earnings before interest and taxes were slightly positive.
Fiat Chrysler Automobiles has announced a restart for its U.S. manufacturing facilities for the week of May 18. That is with the exception of the Belvidere Assembly in Illinois. The Belvidere plant, where the production of Jeep Cherokee takes place will reopen by June 1.
The restart dates face delays a number of times as the coronavirus pandemic unfolded. Ford and General Motors are also considering a restart soon.
