In the second quarter, FCA contained the impact of Covid-19 with a net loss and adjusted net loss, both at € 1 billion. Adjusted EBIT is a negative 0.9 billion euros. North America ended the period positively.
“Our second quarter showed how the decisive actions and the extraordinary contribution of our people allowed FCA to contain the impact of the Covid-19 crisis. While the company remains vigilant about the health and safety of its employees, our factories are now operational, the network has resumed sales both in offices and online and we have the flexibility and financial strength to carry out our plans. ” FCA chief executive officer Mike Manley comments on second quarter results.
Operating results and cash flow improved significantly in June. FCA underlines this in the note on the second quarter accounts. FCA has available liquidity of 17.5 billion euro at the end of June, which excludes the unused portion of 4.5 billion euro of the 6.3 billion credit line of Intesa Sanpaolo. In addition, a multi-tranche bond loan was issued in July for 3.5 billion euro as part of the Medium Term Note Program which replaces the 3.5 billion euro bridge credit line syndicated in April.
“The investigation launched by the European Commission is not expected to cause delays in the timing of the merger ” says FCA in the note on the accounts. “The Covid-19 crisis further underlined the stringent logic of the merger between Groupe Psa and FCA. The work of both teams to complete the merger has continued apace and we expect to achieve the goal of becoming a single companies by the first quarter of 2021. Antitrust approvals were obtained in 12 of the 22 jurisdictions involved.
The overall global deliveries of FCA in the quarter were 424,000, down 63% due to the suspension of production and the fall in demand following the pandemic. The safe and successful restart of production activities in the second half of May and the cost control actions brought North America positive, with an adjusted EBIT of 39 million euros. In the United States, demand was higher than expected, with FCA improving the retail market share in the quarter. In addition, Dodge became the first American brand to reach the top spot in the JD Power Initial Quality Study annual survey. In Latin America for the first time FCA is in first place in terms of sales and market share, which stood at 15.9% for the quarter. This result was driven by the Brazilian market where FCA placed first, with a share of 19.8%, thanks to the strong demand for the Group’s pickups and SUVs. The commercial launch of the new Fiat Strada took place at the end of June, which is registering sustained demand. In Emea, the production plants gradually returned to operation during the quarter. As the market continues to recover, the Group has focused on the launch of Made in Europe electrified vehicles: the Jeep Renegade and Compass “4xe” Phev, starting production in the quarter and the new fully electric Fiat 500 which will be produced starting from the third quarter. Also in the quarter, Maserati anticipated the presentation of the new Ghibli Hybrid with a series of images awaiting the world premiere of the vehicle in July. As a further demonstration of the commitment to invest and elevate this iconic brand, Maserati has confirmed that Maserati Day will be held on September 9-10 in Modena, with the presentation of the new super sports Maserati MC20 and other future models.
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