Automotive fluid systems manufacturer TI Fluid Systems said on Tuesday that interim operating profits had slumped despite posting a marked increase in revenues.
TI Fluid Systems said adjusted underlying earnings had dropped €44.1m to €83.7m, with adjusted net profits tumbling €36.4m to €9.0m and adjusted earnings per share falling seven cents to 1.75 cents.
The London-listed group noted that its decreased profit performance came partly as a result of margins contracting three percentage points to 5.4% and despite revenues growing 2.4% from €1.52m to €1.55m.
TI Fluid Systems declared an interim dividend of one cent, down from 1.93 cents at the same time a year earlier and in line with its annual dividend policy of 30% of adjusted net income.
Chief executive Hans Dieltjens said: The first half of 2022 has been marked by several challenges in the automotive industry. The shortage of microchips and other supplies, the Russian invasion of Ukraine, and the Covid lockdowns in China have significantly hindered OEM production. Additionally, these macroeconomic factors have exacerbated the cost increase pressures, with inflation at levels not seen since the 1990s.
“While market uncertainties and economic risks persist, we anticipate that full-year production volumes will be at, or slightly above 2021 levels, as microchip availability gradually improves, and that inflationary cost increases will continue, albeit at a slower pace. We continue to make good progress with customer negotiations for cost recoveries. As such, we expect the Group’s margins to recover during H2 2022.”
As of 0810 BST, TI Fluid Systems shares were down 0.14% at 173.76p.
Reporting by Iain Gilbert at Sharecast.com
