Aston Martin said it expects profitability to improve this year as it begins deliveries of its next-generation sports cars.
The UK automaker on Wednesday forecast wholesale volumes of about 7,000 units for 2023, slightly below average market expectations of 7,134, but its outlook for an adjusted core profit margin of about 20 percent was ahead of analysts’ average view.
The company sees deliveries taking off in the second half, when revamped models including new iterations of the Vantage, DB11 and DBS sports cars are expected to hit showrooms.
Revenue grew 26 percent to 1.38 billion pounds ($1.67 billion) last year, chiefly because of higher prices, the automaker said on Wednesday. Its core average selling price in 2022 rose 18 percent to 177,000 pounds.
The company reported a bigger adjusted operating loss of 118 million pounds for the year ended Dec. 31, compared with a loss of 74.3 million pounds for the same period a year earlier, because of supply chain snarls that delayed deliveries of its cars.
But that loss came in better than analysts’ average expectations of an adjusted operating loss of 135 million pounds for 2022, according to a company-compiled consensus.
The automaker has struggled with supply chain issues and higher costs. Last year, it hired former Ferrari boss Amedeo Felisa as its new CEO in a bid to emulate the Italian automaker’s success.
Aston Martin is seeking to become sustainably free cash flow positive from 2024, helped by a capital raising last year, through which Saudi Arabia’s Public Investment Fund (PIF) became its second-largest shareholder.
Aston’s fourth-quarter results “beat on volumes and revenues,” Bernstein analysts led by Daniel Roeska said in a note. “The company looks more in control of its destiny today than in a long time.”
Analysts have in the past said Aston’s lack of scale and precarious cash balance made the carmaker vulnerable as it struggled to deliver the Valkyrie supercar on time.
On Wednesday, Aston said it expects 2023 to be the final year of significant capital investments on combustion-engine technology as it pivots to battery-powered cars.
Shifting to EVs will require a sound battery strategy, especially given that the UK still lacks the cell-making capability critical to manufacturers buliding electric models in volume.
Britain’s shrinking car manufacturing base — production has slumped to the lowest in 66 years — is cutting against the business case for battery suppliers to set up factories.
Bloomberg contributed to this report