Jaguar Land Rover reported a 22% uptick in revenue last financial quarter, citing an improvement in wholesale volumes and component supply over the second quarter, but the semiconductor shortage continues to restrict its profitability.
In the three months to December 2021 – the third quarter of the fiscal year – JLR delivered 69,182 cars to dealers, an 8% increase on the previous quarter, and boosted vehicle output by 41% to 72,184 units.
Revenue climbed to £4.7 billion for the quarter, compared to AUD$7.42 billion in Q2, while its pre-tax margin increased to 1.4% and its free cash flow to AUD$312 million. However, pre-tax profits came in at a AUD$17 million loss – which contrasts heavily with a AUD$435 million pre-tax profit in the same period the year before.
JLR enters the final financial quarter with AUD$4.56 billion in cash and short-term investments, and notes that it has an undrawn revolving credit facility of AUD$3.81 billion available until July of this year, which goes down to AUD$2.85 billion through March 2024.
The company notes that the ongoing chip shortage – and the resultant shortfall in dealer stock – continues to restrict sales volumes. Retail sales fell 13.6% last quarter to 80,126 vehicles – which is a more significant 36.6% down on the same period in 2020.
But supply of semiconductor chips did improve during the quarter, and JLR is “engaging with first-tier suppliers and directly with the chip manufacturers to secure supply longer-term”. It therefore expects profits to improve further in this current quarter, and has not adjusted any of the medium- or long-term financial targets outlined as part of CEO Thierry Bolloré’s bold Reimagine strategy.
Year-on-year, JLR increased the proportion of electric vehicle retail sales, comprising mild-hybrids, plug-in hybrids and battery-electric vehicles, from 53% to 69%, and diversified its model mix, thanks to a 30% increase in wholesales of the new Range Rover.
The company currently has 155,000 orders to fulfil, an increase of 30,000 units over the second quarter, which it attributes to “strong demand for the new Range Rover” ahead of deliveries beginning in the final quarter of this year.
Bolloré said: “Whilst semiconductor supplies have continued to constrain sales this quarter, we continue to see very strong demand for our products underlining the desirability of our vehicles. The global order book is at record levels and has grown an incredible 30,000 units for the New Range Rover before deliveries even start this quarter.
“We continue to execute our Reimagine strategy to realise the full potential of the business and create the next generation of the most desirable luxury vehicles for the most discerning of customers.”
Felix Page