Aston Martin Takes £15 Million Hit From Valkyrie Ramp-Up Issues
Aston Martin Takes £15 Million Hit From Valkyrie Ramp-Up Issues
(Bloomberg) -- Aston Martin Lagonda Global Holdings Plc said it has put its Valkyrie project back on track after deliveries of the 2.4 million-pound ($3.3 million) car fell short of expectations last year.
The company shipped just 10 units in the fourth quarter, lowering adjusted Ebitda by about 15 million pounds. Aston Martin said Friday it still reached its goal of selling more than 6,000 cars last year thanks to robust demand for the DBX, its first sport utility vehicle.
The Valkyrie program is now running “at rate” and the company expects “significant growth” from the sold-out model this year, Chief Executive Officer Tobias Moers said in a statement.
The Valkyrie’s launch has been plagued by electronics issues, people familiar with the matter told Bloomberg News last month. While the car is a limited-run special model that will sell in low volumes, analysts have described it as pivotal to the company’s year-end results. Bloomberg Intelligence estimates each Valkyrie sale makes the same earnings contribution as 21 Vantage V8 models.
“We believe the impact has already largely been priced in to the shares,” Gabriel Adler, a Citigroup Inc. analyst with a buy rating on Aston Martin’s stock, wrote in a note to clients. “We do not believe this impacts the company’s ability to execute on its mid-term turnaround.”
Aston Martin has spent the last 18 months restructuring after a rescue by Canadian billionaire Lawrence Stroll. The 62-year-old fashion mogul injected much-needed cash and forged closer ties with Daimler AG’s Mercedes-Benz to ensure the company survives tumultuous times for the auto industry.
Moers is now broadening Aston Martin’s lineup. The company delivered 3,001 DBX units to dealers last year and plans to roll out another iteration of the SUV in 2022 after introducing a smaller-engine version in China in November.
Aston Martin shares traded up 2.6% as of 9:35 a.m. London time. The stock fell 28% last year.
The carmaker confirmed its medium-term guidance and said it ended the year with a cash balance of 420 million pounds, higher than previously anticipated. Aston Martin will announce full-year results on Feb. 24.
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