Riding on a very good season of sale, the Italian supercar manufacturer reported profits that surpassed the expectations of the analysts as the company declared that it had sold out all of its models for 2018 as well as a some from the 2019.
For this year and part of 2019, the company has a production line that is running at complete full capacity, said the Chief Executive Officer of the Italian car maker Sergio Marchionne. While speaking on a call with analysts, the CEO said that the GTC4 Lusso family car was the only model that still had some availability left for buyers.
“Everything else is pretty well gone,” Marchionne said.
The shares of the company rose to touch a record of 112.25 euros on Friday in Milan, noting an increase of as much as 6.6 per cent. This helped the company to achieve a market value of 20.7 billion euros ($24.7 billion). the comments of the CEO came after European markets closed trading but the comments had their impact in the United States where shares of the company saw a rise.
In the first quarter, there was an increase of 13 per cent in the adjusted earnings before interest, taxes, depreciation and amortization to reach 272 million euros ($326 million) for the Maranello, Italy-based company. Ferrari had been carved out of a spin off of Fiat Chrysler Automobiles NV. The earnings surpassed market expectations of 262 million-euro which was the average income noted by a team of eight analysts surveyed by Bloomberg.
Marchionne, who is set to retire soon, is currently working on his last business plan for the race-car maker. He was at the helm of affairs at Fiat for the last 14 years. He will present the five-year strategy to the public and the investors in September. It has been reported that the plan will include the expansion and diversification of plan of the iconic Italian brand into new car segments that could include manufacturing of sport utility vehicles and electric hybrid cars.
Marchionne said in an interview last month that a gasoline-electric hybrid car “you could run silently” is being tested by Ferrari. Marchionne said in a television interview that Ferrari is working on the development of vehicles that will show “the full power of electrification,” even though the company does not have any intention to manufacture complete electric cars until 2022.
The company has imposed upon itself a cap of 10,000-car limit which has enabled it to function fuel emission regulations that are less stringent and this change in the strategy of the company is happening at a time when it has set a target of annual sales that is more than the self-imposed cap. The anticipated growth by Ferrari has driven the company to predict a rise in profits to at least 1.1 billion euros for the current year and expects profits to be 2 billion euros by 2022.
(Adapted from Bloomberg.com)