Above the entrance to the Aston Martin luxury car dealership on Park Lane in central London on April 11, 2024, a sign is pictured.
Luxury carmaker Aston Martin reported widening losses in the first quarter as the company stopped production of its core models ahead of launching a new range of vehicles later this year. Shares initially dropped by more than 12% in early London trading but recovered slightly to 6.4% by 2:25 p.m.
Adjusted loss before tax almost doubled to £110.5 million ($137.8 million) compared to £57.3 million in the previous year. Revenue declined by 10% to £267.7 million, and net debt increased by 20% to £1.04 billion.
Analysts at Jefferies highlighted a 26% decrease in volumes and noted a “big miss across metrics.” Aston Martin announced that the delivery of four new models in 2024 would drive significant growth in the second half of the year and beyond.
Chairman Lawrence Stroll mentioned the company’s transition period in the first quarter as it ceased production and delivery of outgoing core models before ramping up production of new models. He also emphasized the strengthening of the balance sheet through refinancing and improved terms on five-year senior secured notes.
By region, wholesale volumes fell by 35% in the Americas, 30% in the U.K., and 17% in Europe, the Middle East, and Africa. SUV wholesales dropped by 63% due to a transitional ramp down in volumes ahead of the new model DBX707 launch.
Susannah Streeter from Hargreaves Lansdown attributed Aston Martin’s struggles to high interest rates affecting demand for luxury vehicles. The company reiterated its full-year targets for wholesale volume growth and gross margins improvement.
Aston Martin is preparing to welcome new CEO Adrian Hallmark, currently leading Bentley, in the fall. This will be the company’s third new CEO since 2020. Stellantis, another global automaker, also reported a sales slowdown as it readies to launch new models this year.
Luxury carmaker Aston Martin reported widening losses in the first quarter of the year as they stopped production of their core models in preparation for the launch of new vehicles. Shares plunged more than 12% before recovering slightly. Adjusted loss before tax nearly doubled compared to the previous year, with revenue falling 10% and net debt increasing by 20%. The company’s debt pile has been a concern for investors, contributing to a decline in share price since its 2018 listing. Aston Martin plans to introduce four new models in 2024 to drive growth in the second half of the year. The company is aiming for high single-digit percentage wholesale volume growth and improving gross margins. Incoming CEO Adrian Hallmark, former leader of Bentley, will join the company in the fall. The results are in line with other automakers, such as Stellantis, who also reported a sales slowdown as they prepare to launch new models.
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