Yahoo Finance Aston Martin’s turnaround hit by production delays as losses mount
Aston Martin said it would deliver fewer cars than expected this year after supply chain and software challenges impacted production of its flagship sports car.
The luxury carmaker said the delays to DB12 deliveries contributed to losses of £48.4m in the third quarter, which was higher than the £38m deficit that analysts expected.
Wednesday’s announcement sent Aston Martin’s shares down by more than 15pc in early trading, as they fell to their lowest level since May.
Overall, the company said it will sell 6,700 models of its DB12 grand tourer this year, down from its earlier target of 7,000.
This marks a setback for the company’s billionaire owner Lawrence Stroll who has been attempting to turn the business around.
Aston Martin’s shares rallied strongly in the first half of the year following a series of deals with China’s Geely and Tesla rival Lucid, although they have fallen by more than 50pc since August.
Barclays analysts said the company’s “DB12 demand and ramp-up issues don’t bode well”, adding that the results were “unconvincing”.
Despite the production delays across its third quarter, Aston Martin said it still expects to hit its target of £2bn sales per year by 2025, which will drive its bid to restore profits.
It said it expected to post “significant growth” compared to last year, “driven by an increase in volumes as well as higher gross margin”.
Chief executive Amedeo Felisa hailed the “exceptional demand” for the DB12 but said that “given the slight delays in the initial production ramp-up we have marginally updated our volume expectations for the year”.
Last year, Saudi Arabia’s sovereign wealth fund invested in the carmaker as part of a £575m rights issue, which it launched to help pay down debts.
As a result of the investment, Saudi’s Public Investment Fund became Aston’s second-largest investor after Mr Stroll.
