Aston Martin cuts profit guidance on delays, weak China demand

30th Sep 2024 07:37

(Sharecast News) - Aston Martin has revealed that full-year profits are now expected to decline as a result of a cut to wholesale volume guidance due to supply chain disruption and weak demand in China.

The luxury carmaker, officially known as Aston Martin Lagonda Global, said on Monday it was reducing wholesale volume forecasts for 2024 by 1,000 units due to tough market conditions. It also said it needed to "smooth the cadence of wholesale volumes over the coming quarters to deliver on its demand-led approach and maximise production efficiencies".

Vehicles are taking longer to complete, which is affecting the efficiency of operations and delaying deliveries, while the macro environment in China remains tough, Aston Martin said.

As a result, adjusted EBITDA for the full year will now be "slightly below" 2023, while the target of positive free cash flow in the second half will not be achieved.

At the time of its half-year results in July, Aston Martin said it had expected "enhanced profitability and EBITDA" for the full year, and that free cash flow generation would see an inflection point after outflows registered in the second quarter.

Chief executive Adrian Hallmark, who joined the board last month, said that "near perfect execution" was required to meet the company's ambitious 2024 targets.

"External factors within the global automotive industry, including supply chain disruption and weak demand in China, are now impacting Aston Martin's volume outlook for the remainder of 2024. Concurrent with the significant ramp-up in production for the second half of the year, following new model introductions, the company is experiencing a growing number of late component arrivals due to disruption at several of its suppliers," the company said in a statement.