3:57 pm, November 1, 2021
Jaguar Land Rover has announced a second-quarter pre-tax loss of £302m as the firm continues to struggle against the global semiconductor shortage.
Figures released today paint a grim picture of the firm with revenue also down as a result of the crisis.
In 2019 – the last year before the pandemic – JLR’s Q2 results showed a turnover of £6.1bn and a pre-tax profit of £156m.
However, since then, the figures have come crashing down, with turnover now standing at £3.9bn in the three months to September 30.
The pre-tax loss of £302m represents a decline of close to 294 per cent when compared with 2019.
At the same stage last year, the firm made a pre-tax profit of £65m against a backdrop of global lockdowns.
In Q2 this year, wholesales to dealers during the quarter stood at 64,032 vehicles, down 12.8 per cent year on year, while retail sales were 92,710 vehicles, a slide of 18.4 per cent.
The results showed the worldwide nature of the semiconductor problem, with retail figures lower across most regions.
North America slipped by 15.6 per cent, China by 6.3 per cent and continental Europe by 17 per cent.
Closer to home, there was an even bigger decline, with retail falling by 47.6 per cent in the UK.
With production lines grinding to a halt because of the ongoing microchip crisis, retail sales of all models were lower year on year except for the new Land Rover Defender, which retailed 16,725 vehicles – up 70.4 per cent year on year.
Despite the apparently bleak outlook, though, there was some good news for the firm.
Its free cash outflow was £664m, after £484m of investment spending and £501m volume-related working capital outflow.
The figures were significantly better than earlier guidance for a £1bn free cash outflow.
Overall, JLR ended the quarter with total cash and short-term investments of £3.8bn, after the issue of €500m seven-year and $500m eight-year bonds, which resulting in £5.9bn liquidity in total.
The company says it continues to see strong demand for its products, with global retail orders at record levels of more than 125,000 vehicles.
Adrian Mardell, Jaguar Land Rover’s chief financial officer, said: ‘The global shortage of semiconductors continued to constrain our production, sales and financial performance, but we’re encouraged to see the continuing strong demand for our products with order books at new record levels.
‘We were pleased the cash outflow on these volumes came in significantly better than expected, reflecting the progress we are making to reduce the break-even point for the business through product mix optimisation and cost controls.’
Thierry Bollore, Jaguar Land Rover’s chief executive, added: ‘The global semiconductor shortage remains challenging but I’m pleased to see the actions we have been implementing reduce the impact.
‘With strong customer demand with a record order book, we are well placed to return to strong financial performance as semiconductor supply begins to improve.’
