Tata Motors-owned Jaguar Land Rover (JLR) posted a pre-tax loss of 413 million pounds in the first quarter results for the 2020-21 fiscal year, amid significant impact on sales and profit due to the lockdown.
In the three months until June 30, Britain's luxury carmaker said the UK market was particularly impacted by the pandemic with sales down 69.5 percent.
However, it said that sales improved month-by-month within the quarter across all regions as economies re-opened, with June retails down 24.9 percent, highlighting a recovery in China and North America as “particularly encouraging”.
“Jaguar Land Rover has reacted with resilience and agility to the extraordinary challenges faced in the first three months of the new fiscal year, adapting rapidly to the widespread macro-economic disruption and uncertainty facing our industry,” said Dr Ralf Speth, the outgoing CEO of JLR.
“Through this unprecedented time, we have continued to bring outstanding new vehicles to market, electrifying our multi-award-winning range and building demand for the new Land Rover Defender, an icon reimagined for the digital age," he said.
"As the lockdowns ease, we will emerge from the pandemic with our most advanced product line-up yet, and with the financial and operating measures in place to return to long-term sustainable profit,” he said.
The company said that about 98 percent of its retailers worldwide are now fully or partially open and all JLR plants have resumed production, with the exception of the Castle Bromwich facility in the West Midlands region of England, which will gradually restart from August 10.
“All locations are operating with robust protocols and guidelines to ensure effective social distancing, hygiene and health monitoring, whilst still enabling production to increase in line with recovering demand,” JLR said.
For the first three months of the 2020-21 fiscal year, revenue was 2.9 billion pounds in the quarter.
The Chery Jaguar Land Rover Joint Venture in China achieved break-even profits in the quarter. Free cash flow was negative 1.5 billion pounds including a one-time working capital outflow of 1.1 billion pounds resulting from the plant shutdowns, which is about 500 million pounds better than previous guidance, the company said.
It added that despite the significant impact of COVID-19, the company successfully completed 647 million pounds of new funding and ended the quarter with “solid liquidity” of 4.7 billion pounds, including 2.75 billion pounds of cash and short-term investments and a 1.9 billion pounds undrawn revolving credit facility.
“The fundamental strengths of Jaguar Land Rover have been tested in 2020 and we will pass this test to succeed in the future. Our exciting pipeline of new, advanced products places us at the forefront of our industry,” added Speth, who will be succeeded by Thierry Bolloré as CEO next month.
“We have a clear plan, a highly-skilled, creative team and unparalleled technical capabilities. I look forward to working with my successor Thierry Bolloré as Jaguar Land Rover focuses on its Destination Zero mission, and seeks to deliver the autonomous, connected, electric and shared experiences that our customers will love, for life with integrity,” said Speth, who will assume the role of non-executive vice-chairman of JLR.
The carmaker part of the Tata Group said that sales of its New Land Rover Defender have started to ramp up in the quarter in the UK, Europe, North America, and some overseas markets, with sales beginning in China and other markets from July onwards.
Plug-in hybrid and the recently-announced Hard Top commercial derivatives will be available later in the year.
The expected recovery in sales will also be supported by the newly-revealed enhancements to the Range Rover and Range Rover Sport.
For the remainder of the fiscal year 2020-21, Jaguar Land Rover said it will continue to manage costs and investment spending rigorously to maintain sufficient liquidity and stressed that although the outlook remains “very uncertain” given COVID-19, the company expects a gradual increase in sales, profitability and cash flow over the year.