Luxury carmaker Aston Martin reported widening losses in the first quarter as it halted production of its core models in preparation for the launch of new vehicles later in the year. The company’s shares dropped more than 12% in early trading in London. Adjusted loss before tax nearly doubled to £110.5 million compared to the previous year, while revenue fell 10% to £267.7 million and net debt increased by 20% to £1.04 billion. The company’s substantial debt load has been a concern for investors and has contributed to a sharp decline in Aston Martin’s share price since its listing in 2018.
Analysts at Jefferies noted a “big miss across metrics,” highlighting a 26% drop in volumes for Aston Martin. The company announced plans for significant growth in the second half of the year and beyond with the delivery of four new models in 2024. Chairman Lawrence Stroll stated that the company had made progress in strengthening its balance sheet through refinancing and improved credit terms. Aston Martin aims to position itself uniquely with a fully reinvigorated core range of models by the end of the year. By region, wholesale volumes declined by 35% in the Americas, 30% in the U.K., 17% in Europe, the Middle East, and Africa, and 14% in Asia-Pacific.
SUV wholesales dropped by 63% due to a transitional decrease in volumes ahead of the launch of the new model DBX707. The company reaffirmed its full-year target for high single-digit percentage wholesale volume growth and improved gross margins towards a longstanding target of 40%. Adrian Hallmark, the current leader of Bentley, is set to join Aston Martin as its new chief executive officer in the fall, making him the third new CEO since 2020. The results from Aston Martin come after global automaker Stellantis reported a slowdown in sales, similar to Aston Martin, as it prepares for the launch of a new range of models this year.
In conclusion, Aston Martin’s first-quarter results show widening losses as the company halted production of its core models to prepare for the launch of new vehicles. Analysts noted a significant drop in volumes, leading to a 10% decrease in revenue and a 20% increase in net debt. The company aims for significant growth in the second half of the year with the delivery of four new models in 2024. Despite challenges, Aston Martin is working on strengthening its balance sheet and positioning itself for success with a fully reinvigorated core range of models by the end of the year. The arrival of a new CEO in the fall and continued efforts to improve gross margins and wholesale volume growth indicate the company’s commitment to long-term success in the luxury car market.
