FCA reports a loss of EUR 1.69 billion for Q1 2020

KUALA LUMPUR: For the Q1 of 2020, FCA has reported a loss of 1.69 billion euros that’s almost RM 7.9 billion. The company also warned of a significant dip for the coming months, even with its most profitable North American truck business resuming operations from May 18 - as reported by Reuters.

A year earlier, i.e., in 2019, the FCA accounted for a EUR 508 million profit. In a statement, the company said, “The pandemic has had, and continues to have, a significant impact on our operations.” Though the company continues to make a profit, it’s 95% less than the previous year.

Also, due to all the uncertainty surrounding the coronavirus pandemic the company has been forced to withdraw its full-year guidance. But it said that it would be updated once there is a better view of the pandemic’s impact. Last October, Fiat Chrysler, and PSA Group signed a binding 50:50 merger deal, and both reported the work on the tie-up is progressing well.

The terms of the deal between the Italian-American automaker group haven’t been changed due to the pandemic. FCA chief executive, Michale Manley said, “the company remains committed to completing the transaction by the end of this year or early 2021.” A well-planned EUR 1.1 billion dividend is now under review; also, FCA has scrapped its full-year earnings forecast.

The FCA production facility in China and Europe have already started to re-open with the North American facilities getting back on track from May 18. The North American market is vital to FCA, as most of its revenue comes from here. Last year, the market recorded a 7% hike in the quarterly sales of the Ram trucks, and FCAs share in the full-size pickup truck market grew to 24%.

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In Q1 of 2020, the company’s capital expenditure increased due to its spending on Grand Wagoneer and Jeep Wagoneer models along with the next-gen Grand Cherokee. It is expected that the full-year capital expenditure estimates would be low by EUR 1 billion as the key programme launches are delayed by almost three months, as reported by the Reuters.

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