Vitesco Technologies posts 25.4 million euro in net income for H1 2022

Vitesco says its performance exceeded expectations in the second quarter despite ongoing shortages of semiconductors, production outages in China due to lockdowns, and the impact of worldwide increases in inflation.

Vitesco Technologies posts 25.4 million euro in net income for H1 2022

Vitesco Technologies, a leading international developer and manufacturer of advanced drive technologies for sustainable mobility has announced its financial results for the second quarter of 2022 and for the first half of 2022.

The company reported revenue of 2.17 billion euro (Rs 17,412 crore), up 3.3% in Q2 2022, compared to 2.09 billion euro (Rs 16,770 crore) for the same period last year. The net income came at 36.7 million euro (Rs 294 crore) versus 0.2 million euro (Rs 1.6 crore) last year. For the first half of 2022, the company reported consolidated sales of 4.42 billion euro (Rs 35,466 crore), which was just 0.6% higher compared to same period last year. However, compared to a net loss of 31.5 million euro (Rs 252 crore) the company reported a net income of 25.4 million euro (Rs 203 crore) in the first half of 2022.

Vitesco says its performance exceeded expectations in the second quarter despite ongoing shortages of semiconductors, production outages in China due to lockdowns, and the impact of worldwide increases in inflation. New orders at Vitesco Technologies also remained robust.

In the second quarter, the company says it won orders amounting to 3.7 billion euro (Rs 29,688 crore) were received, including 3 billion euro (Rs 24,072 crore) in the electrification market. The major order of 1.7 billion euro (Rs 13,640 crore) announced in May, which is for a BMS that Vitesco Technologies is supplying to a global customer, was included in the volume of new orders for the second quarter of 2022.

Andreas Wolf, CEO, Vitesco Technologies said, “A major highlight was our success in signing a cooperation agreement with the Renault Group. This partnership will allow us to continue stepping up our growth in the field of electrification and work with the Renault Group to develop a power electronics solution that is unique in the market.”

Under this partnership, the Renault Group is also entering into a multi-year agreement with Vitesco Technologies concerning power electronics for hybrid Renault vehicles. From 2025 onward, it will also supply the Renault Group with a high-voltage box for electric vehicles, which houses both a DC/DC converter and a charger.

Werner Volz, CFO, Vitesco Technologies said, “There were again many challenges to overcome in the second quarter. We did so by maintaining a disciplined approach to costs and focusing on operational efficiency. This enabled us to cope well with the lockdowns in China due to Covid-19, for example. Reaching successful agreement with our customers on the first price adjustments also had a positive impact on our sales and earnings.”

Furthermore, significant inflation effects in the form of increased energy and transportation costs, due in no small part to Russia’s war of aggression in Ukraine, weighed on the company’s overall earnings. Lockdowns in China because of Covid-19 were also a challenge for the industry and therefore for Vitesco Technologies, especially at the start of the quarter under review. “The growth of our business in North America and the positive effects of exchange rates compensated for the lockdown-related slowdown in production that occurred in China in the second quarter,” added Wolf.

Outlook

The company’s outlook for 2022 as a whole remains unchanged, with Vitesco Technologies anticipating sales in a range of 8.6 billion euro (Rs 69,006 crore) to 9.1 billion euro (Rs 73,010 crore) and an adjusted EBIT margin of between 2.2 percent and 2.7 percent. Free cash flow for 2022 is likely to be in excess of 50 million euro (Rs 401 crore). The company says the reasons why the outlook for business development was not adjusted despite reduced vehicle production figures are, in particular, supportive exchange rate developments, agreed price adjustments and the continued expected improvement in semiconductor availability in the second half of the year. Given the ongoing volatile developments at global level, such as Russia’s war of aggression in Ukraine, adjustments to production as a result of Covid-19, and the energy supply situation, the outlook continues to be subject to significant uncertainty.

Also read: Vitesco Technologies targets to go carbon neutral in India by 2030

Vitesco Technologies’ new Rs 240 crore Talegaon plant in Pune goes on stream

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