LONDON — Luxury carmaker Aston Martin on Wednesday reported widening losses in the first quarter, as the company stopped production of its core models ahead of a launch a new range of vehicles later this year.
Shares plunged more than 12% in early deals in London.
Adjusted loss before tax nearly doubled to £110.5 million ($137.8 million) compared to a loss of £57.3 million in the previous year. Analysts had expected a £93 million first-quarter loss, according to Reuters.
Revenue fell 10% to £267.7 million, while net debt increased 20% to £1.04 billion. The company’s hefty debt pile is a long-running concern for investors which has contributed to a steep fall in Aston Martin’s share price since its listing in 2018.
Analysts at Jefferies noted the “big miss across metrics,” flagging a 26% drop in volumes.
Aston Martin said Wednesday that the delivery of four new models in 2024 would power “significant growth” in the second half of the year and beyond.
“Our first quarter performance reflects this expected period of transition, as we ceased production and delivery of our outgoing core models ahead of the ramp up in production of the new Vantage, upgraded DBX707 and our upcoming V12 flagship sports car which we’ve confirmed today,” Chairman Lawrence Stroll said.
Stroll added that Aston Martin had made a “significant step” in strengthening its balance sheet in the quarter, as it completed a refinancing with improved terms on five-year senior secured notes following a credit rating upgrade.
“Aston Martin will be uniquely positioned with a fully reinvigorated core range of models by the end of the year,” the company said in a statement.
By region, wholesale volumes slumped by 35% in the Americas, by 30% in the U.K., and by 17% in the wider Europe, Middle East and Africa region. Asia-Pacific volumes were down 14%.
SUV wholesales declined 63% due to a “transitional ramp down in volumes ahead of the recently announced launch of the new model DBX707,” according to the company.
Aston Martin reiterated its full-year target for high single-digit percentage wholesale volume growth, and for gross margins to improve towards its longstanding 40% target.
The company is preparing to welcome new chief executive officer Adrian Hallmark, current leader of Bentley, in the fall. Hallmark will be its third new CEO since 2020.
Aston Martin’s results follow those of global automaker Stellantis on Tuesday, which also reported a sales slowdown as it prepares to launch a slew of new models this year.
