Amotiv shares shed nearly 10% as HY profit slides
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More news: Amotiv was the worst performing ASX 200 stock in early trading after the car equipment company reported a 36% downturn in first-half profit.
Amotiv shares were down 9.4% to $9.62 by 11:15am AEDT, extending losses of around 20% over the last 12 months.
UBS analysts called the result "slightly messy", marked by a revenue slowdown in Amotiv's lighting, power and electrical segment. They noted that the group's 4WD accessories and trailering business performed "better than we feared" through a "challenging period" for vehicle volumes and softer caravan and New Zealand markets.
RBC Capital Markets analyst Jack Lynch expects Amotiv's performance to improve in the second half of the year, with the company reiterating revenue and EBITDA growth guidance.
Amotiv HY profit plunges amid 'challenging' environment
The news: Amotiv reported a 36% slide in first-half profit after the car equipment company confirmed a $9.4 million impairment charge on its Fully Equipped New Zealand business due to "ongoing weakness" in the country's macroeconomic environment.
The numbers: Amotiv reported statutory net profit after tax of $33 million for the six months to December, down 35.8% compared to the prior corresponding period.
The result included a $9.4 million impairment on its Fully Equipped business, an aftermarket accessory supplier based in New Zealand. Amotiv also recognised $1 million of other brand impairments following restructuring activity during the period.
Revenue edged up 2.3% year on year to $503.7 million, benefitting from contributions from acquisitions in the previous year. Organic revenue lowered 3%.
The company declared a fully franked interim dividend of 18.5 cents per share, unchanged from a year ago.
The context: Amotiv — which manufactures, imports, distributes, and sells automotive products — said the result reflects a "challenging environment", offset by the company's "strong market positions" and "disciplined cost management".
Gross margins lowered during the period due to acquisitions in its lighting, power and electrical segment, as well as higher freight costs and adverse mix in its 4WD accessories and trailering business.
The sources: ASX announcement, UBS research, RBC Capital Markets research
