Aston Martin posted a larger third quarter loss than last year due to high borrowing costs, despite sales more than doubling due to demand for its DBX sport utility vehicle.
The company took out £ 1.1bn of high-interest debt last October as part of a refinancing aimed at providing much-needed liquidity to the company while it executes a turnaround plan.
Funding costs reached £ 133million between August and October of this year due to interest on debt, far higher than the £ 79million spent by Aston in the same period the year before.
As a result, the company’s pre-tax loss for the quarter was £ 97.9million, compared to a loss of £ 80.5million in the same period last year, despite improving performance. conditions of the underlying activity.
“The cost is higher than we would have liked,” CFO Ken Gregor told the Financial Times. He said the company would be likely to have large interest payments until “probably 2023” when it hoped to refinance the debt again.
“It’s on hold until we are able to refinance,” he said, adding that the company would need more time to turn a net profit, which the new management team had. hoped to do this this year.
After financing costs were eliminated, Aston’s operating loss was £ 30.2million, up from £ 69.8million in the same quarter of 2020.
It sold 1,349 cars in the quarter, up from 660 a year earlier. As a result, revenues reached £ 237.6million, up from £ 124million, while the average selling price of its base models was £ 148,000, up from £ 130,000 a year earlier. .
The company’s profitability in the last quarter of the year depends on deliveries of the Aston Martin Valkyrie, its £ 2.5million ‘hypercar’.
The project has experienced delays and the group has now postponed the first deliveries expected in the last months of 2021.
“It slipped, we were really, really ambitious,” managing director Tobias Moers told the FT, adding that this was a very complicated model, with only six weeks of construction of the roof. He said production was already “up and running” with the company expecting to deliver double-digit numbers this year.
Moers said demand for its sports cars was “very strong,” with dealer inventory levels at the lowest level in company history.
Interest in the DBX, the SUV that Aston is building at its second factory in Wales, is “living up to expectations”, he added, saying a new derivative of the model would boost orders.
The company had four cars in the last James Bond film No time to die, of which only DBS is currently manufactured.
Moers said the film’s impact on sales was difficult to judge, but a new website that allows users to virtually configure a car has led to a tripling of dealership referrals.
The number of customers paying for additional features they tried on the system also increased by 15%, he said.