(Source: Bloomberg) As the business discontinued manufacture of its Vantage sports car model, Aston Martin Lagonda Global Holdings Plc suffered a sharp decline in sales of its luxury vehicles in the first quarter.
The British automaker said it shipped 945 cars during the period, a 26% decrease from the previous year, and the shares fell for the first time in six months. Sales and adjusted profit decreased and fell short of analysts’ projections. While it is ready to release new models, the business has adhered to its annual guidance.
According to a statement by Executive Chairman Lawrence Stroll, the decline is a result of the discontinuation of certain of Aston Martin’s main models’ manufacture and delivery. Although they haven’t gone on sale yet, the business has begun producing updated versions of the Vantage and the DBX707 SUV. Goldman Sachs analyst George Galliers lowered his projections and stated in a note that Aston Martin needs these new vehicles to help it control expenses.
Aston Martin reported on Wednesday that revenue fell 10% to £267.7 million ($334 million), while adjusted earnings before interest, taxes, depreciation, and amortization fell 34% to £19.9 million.
According to Bloomberg Intelligence:
Aston’s disastrous first-quarter cash burn, which increased net debt to almost £1 billion, significantly depletes reserves and raises questions about the company’s capacity to generate positive free cash in the second half of the year. The stock is still overhanging because of that. Given that the first quarter’s unit sales were down 26% due to four new model changes—a reflection of the sector’s overall weakness—the cash objective cannot come soon enough. In order to ramp up new DB12, Vantage, and DBX707 and guarantee that Valhalla and the DBS replacement are completed on schedule, execution will be essential.
– Automotive analyst at BI called Michael Dean
Aston Martin stock fell as much as 14% during the day, the biggest since November 1. In London, they dropped 7.6% to 137 pence at 8:20 a.m.
After saving the firm in 2020, Stroll has had to seek money several times to complete a protracted recovery at Aston Martin. New investors, including Saudi Arabia’s Public Investment Fund, have joined the company. In an effort to allay investor worries about its debt load, the company completed a £1.15 billion ($1.4 billion) refinancing in March. Nevertheless, it will still be required to pay hefty interest rates on the new notes.
As part of its plan to release new models more often, Aston Martin also announced on Wednesday that it will introduce a new sports car with a V12 engine. Later this year, it established plans for another special model targeted at the ultra-rich.
For the time, Aston Martin vehicles sold for an average of £253,000, which is 19% more than in the corresponding quarter of 2023.
Stroll’s turnaround will soon receive additional assistance. As the fourth chief executive officer since Stroll’s arrival, former executive director of Bentley Motors Ltd. Adrian Hallmark will assume the role of chief executive officer on or before October 1st, succeeding the 77-year-old Amedeo Felisa.
In order to facilitate the switch to battery-only vehicles, Aston Martin decided to create a range of plug-in hybrids in February, delaying the introduction of its first fully electric vehicle by a year until 2026.
According to a report by Bloomberg News last week, Stroll is in the early stages of negotiations to sell the luxury auto manufacturer another minority stake he owns in the Aston Martin F1 team.
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