Fiat Chrysler Automobiles NV posted a smaller-than-expected loss for the second quarter as the automaker looks to shore up results and preserve the terms of its merger with Peugeot maker PSA Group.
- The 928 million-euro (US$1.1 billion) adjusted loss before interest and taxes reported in a statement Friday compared with analysts’ average estimate for a deficit of 1.97 billion euros. Net revenue plunged to 11.7 billion euros, trailing consensus for 14.1 billion euros.
- The company didn’t give a new outlook for the year after scrapping it in March.
- Fiat Chrysler reported negative industrial free cash flow of 4.9 billion euros in the second quarter, putting pressure on the automaker to shore up its finances. Italy approved a 6.3 billion-euro credit facility for the company last month, the biggest government-backed financing that a European country has arranged for a carmaker since the start of the pandemic.
- There’s a lot at stake for Fiat Chrysler as it tries to recover from the disruption of the coronavirus pandemic. PSA Chief Executive Officer Carlos Tavares told Bloomberg Television last week the two companies will finalize their combination based on where their respective cash positions are at the end of this year.
- The comments from Tavares indicated the terms of the planned merger -- including a 5.5 billion-euro special dividend for Fiat Chrysler shareholders -- aren’t set in stone and could be revisited.
- PSA investors who have griped about the special payout will be holding Fiat Chrysler’s numbers up against the first-half profit the French carmaker put up last week, which showed it has weathered Covid-19 better than feared.
- Fiat Chrysler shares rose as much as 1.3 per cent on Friday in Milan trading. The stock slumped 34% this year through Thursday’s close.
- The public-health crisis put a damper on the highly lucrative sales of Ram pickups that Fiat Chrysler CEO Mike Manley had been counting on to keep profit growing. The brand’s pre-virus ascendance was fueling North American earnings and making up for losses in Europe and Asia, but deliveries faltered in the second quarter.
- NOTE: Italy’s top lender Intesa Sanpaolo SpA is financing the loan for Fiat Chrysler, and trade-credit insurer Sace SpA guaranteed 80% of the amount.