Losses widen for Aston Martin amid supply chain and logistics disruption

Aston Martin Lagonda’s share price dropped 15% in early trading after it revealed supply chain issues had meant more than 400 cars were not delivered on schedule in the third quarter.

The luxury car manufacturer has estimated the disruption will cost around £20m this year. It had expected to deliver more than 6,600 vehicles but now expects this could be as low as 6,200.

Pre-tax losses for the nine months of its financial year have reached £511m. This was impacted by a £245m revaluation of US dollar debt, as the pound significantly weakened against the US dollar.

But billionaire chairman Lawrence Stroll remains confident about the medium-term potential of the Warwickshire-headquartered company.

He said: “We have continued to make excellent progress through the first nine months of the year in our vision to become the world’s most desirable, ultra-luxury British performance brand.”

The automotive sector has faced long-standing supply issues caused by semi-conductor shortages, the impact of the pandemic and the war in Ukraine.

Aston Martin has produced 4,000 cars in nine months, which is 4% lower than last year. Deliveries of its DBX model have been particularly affected.

“Over the last two quarters we have encountered specific supply chain challenges that have delayed our ability to meet customer demand,” said Stroll.

“Whilst we moved quickly to resolve the shortages that affected our Q2 performance, our Q3 growth was hindered by new supply chain challenges, impacting more than 400 vehicles that had been planned to be delivered in the quarter.”

In Q3, Aston Martin also completed its £650m equity capital raise, which saw the arrival of the Public Investment Fund (PIF) as a new anchor shareholder, along with fresh investments from both the Yew Tree Consortium and Mercedes-Benz.

Stroll added: “Although these headwinds, which are already improving in Q4, have disrupted our near-term financial performance and modestly impacted our full year guidance, the medium and long-term outlook is robust.”