The Drive Specialist Vitesco Technologies has Lowered its Forecast for the Current Year.
Due to lower recall numbers from car manufacturers, Vitesco now expects revenues of 8.1 billion euros for the full year. Previously, the company had forecasted revenues between 8.3 and 8.8 billion euros, after achieving 9.2 billion euros in the previous year. The margin based on the adjusted earnings before interest and taxes (Ebit) is now expected to increase from 3.7 percent to around 4.0 percent. Previously, the expectation was between 4.5 and 5.0 percent. These new forecasts are below analysts' estimates.
In the second quarter, sales decreased from 2.4 billion to just over 2 billion euros according to preliminary calculations. Particularly, sales of electrification components, which are important for Vitesco, fell from 354 million to 316 million euros. Despite the decline in sales, the adjusted EBIT increased to approximately 82 million euros, up from 67 million euros in the same period last year. This corresponds to a margin of 4.0 percent, compared to 2.9 percent in the previous year.
The reactions of investors to the adjusted forecasts were disappointing. On the Tradegate trading platform, Vitesco shares temporarily lost 2.12 percent, trading at 57.80 euros.
The adjustment of the annual forecast by Vitesco reflects the current challenges in the automotive industry. Despite the increased demand for electric vehicles, the recovery in this segment is slowing down, negatively affecting Vitesco's revenue figures. However, the company remains optimistic about its long-term growth prospects and continues to emphasize the importance of electrification components for its future strategy.
Vitesco Technologies, which emerged as an independent company from the Schaeffler Group in 2019, focuses on drive and electrification solutions for the automotive industry. The ongoing challenges and adjustment of forecasts underscore the need to respond flexibly to market conditions while continuing to make strategic investments in key areas.
