Jaguar Land Rover posted a loss of over £400m in its latest financial year, citing a global computer chip shortage and Russia's war with Ukraine.
The car manufacturer, which has a site in Halewood, said production and sales had been 'significantly impacted' by the global chip shortage. It reported a pre-tax loss of £455m, which included an 'exceptional charge' of £43m for its business in Russia.
In comparison, the company posted a £662m profit, before exceptional items, in the 12 months to March 31, 2021. Revenue also fell by 7% to £18.3bn in the year to March 31, 2022, reports BusinessLive.
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JLR has UK sites in Whitley, Gaydon, Solihull, Manchester, Castle Bromwich, Wolverhampton and Halewood. During its fourth quarter, revenue rose 1% to £4.8bn compared to the prior three months.
The EBIT margin (the ratio of operating profit to net sales) in the quarter was 2% with its pre-tax profit about breakeven (£9m) before the £43m exceptional charge for its business in Russia. Retail sales in the fourth quarter totalled 79,008, down 1% on the third quarter, which was said to be: "a consequence of constrained wholesales and low dealer inventories".
Wholesales for the full year were 294,182, down 15% compared to the prior year while retail sales were 376,381, down 14%. JLR said it expects the global semiconductor shortage to continue through the next fiscal year "with gradual improvement".
However, it added that the Covid lockdowns in China as well as the new Range Rover Sport model changeover are expected to limit volume improvements in Q1, "possibly resulting in negative EBIT and negative cash flows in the quarter".
Chief financial officer Adrian Mardell said: "Despite the ongoing semiconductor supply constraints limiting production, we have delivered a second successive quarter of positive cashflow demonstrating our continuing focus on revenue optimisation and cost efficiencies. Despite the present chip supply, inflation and other challenges, our lower breakeven point should position us well as volumes gradually recover."
Chief executive Thierry Bolloré added: "The environment remains difficult in light of the global chip shortage and other challenges. However, I’m encouraged by the continuing strong customer demand for our products, highlighted by a record order book.
"And we are continuing to execute our Reimagine Strategy with exciting new products like the Defender, New Range Rover and just announced New Range Rover Sport while we are rapidly progressing our plans for a new generation of electric vehicles with our all electric Jaguar strategy and BEV first EMA platform for new Land Rover products."
