Yahoo Finance Aston Martin losses more than double amid hopes for turnaround in 2023
Aston Martin has revealed that its losses more than doubled during 2022 as the sportscar maker spent heavily on new models and struggled through supply chain problems hitting the global car industry.
The UK-listed carmaker reported a loss before tax of £495m in 2022, up from £214m the year before, even as sales rose 26% to £1.4bn. It made an operating loss of £118m after adjusting for some one-off costs, less than the £135m expected by analysts.
The company has struggled for years to turn itself around after an overambitious listing on the London Stock Exchange in late 2018. It was taken over in early 2020 by the fashion billionaire Lawrence Stroll, just as the coronavirus pandemic hit.
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Since then, Stroll has as the executive chair sought to move Aston Martin’s brand upmarket – with higher prices – and cut its crippling debt pile, including a £650m fundraising in July that took money from Saudi Arabia’s public investment fund.
Aston Martin sold 6,400 cars during 2022 but it was hit by higher spending including reinvestments including marketing and expensive new product launches, as well as the impact of high inflation across its operations. At the same time it spent £287m mainly on developing new models.
The company, which will turn 110 this year, said it expected to stop burning through cash in the second half of 2023, and it predicted sales of 7,000 cars in 2023. However, it said the “operating environment remains volatile, including ongoing inflationary pressures and pockets of supply chain disruptions”.
It is also planning for 2023 to be its “peak year” for spending under Stroll’s leadership, including what it said was the “final year of significant expenditure associated with our internal combustion engine portfolio”. Aston Martin is planning to deliver a series of new vehicles over the year, including the £314,000 DBS 770 Ultimate, and super-expensive “special” cars including the Valkyrie Spider hypercar and the £1.5m DBR22.
Industry analysts have for several years queried how smaller carmakers such as Aston Martin will cope with the expensive move to electric-powered vehicles and increasing demands for digital technology without being owned by a larger car group, as is the case with VW-owned Bentley or BMW-owned Rolls-Royce. Aston Martin does, however, have a deal to share some technology with Mercedes-Benz, which is also a shareholder.
Stroll said the company had continued to “build on the strong foundations that have been established during my three years as executive chairman”, although he acknowledged “industry-wide challenges” during 2022.
“As I have said before, I knew it would take multiple years to build Aston Martin into the world’s most desirable ultra-luxury British performance brand,” he said. “With the heavy lifting behind us, we are now poised to see the results of this transformation, starting in 2023.”
Stroll said the company was on track to earn about £2bn of revenue and £500m by a measure of rough operating profit by 2024-25, and that it would hit 10,000 sales to dealers “over the coming years”. When it listed on the stock market it had planned to hit 10,000 sales by 2020.
Amedeo Felisa, Aston Martin’s chief executive, said there had been a “challenging operating environment throughout 2022”.
He said he expected “significant improvements in profitability in the second half of the year” for 2023 as Aston Martin introduces its next generation of sportscars.
