Aston Martin shares fall 25% after warning blamed on supply disruptions, China

By Louis Goss

Aston Martin Lagonda Global Holdings on Monday said supply disruptions and weakness in China's economy will see it sell 1,000 fewer cars than expected in the remainder of 2024, in news that caused a 25% slump in the carmaker's share price.

The British manufacturer said the slower-than-expected sales will its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) this year come in slightly below the GBP305.9 ($409 million) it posted in 2023.

Analysts polled by Visible Alpha had expected EBITDA of GBP375 million.

Aston Martin explained that it is currently experiencing "a growing number of late component arrivals due to disruption at several of its suppliers," in what had led to delays in the production and delivery of its vehicles.

The luxury car manufacturer has seen its sales to China surge in recent years, in fast-paced growth that in 2021 saw the country account for around 30% of Aston Martin's overall sales. The Asia-Pacific region accounted for more than a fifth of Aston Martin's sales in 2023.

Aston Martin (UK:AML) shares have lost 50% of their value over the previous 12 months as investors have become increasingly concerned about the car maker's mounting losses and growing debt pile.

In the full-year 2023, Aston Martin generated GBP1.63 billion in revenue by selling a total of 6,620 of its luxury cars. Aston Martin said it now expects to see a "high single digit percentage" drop in its wholesale volumes, compared to the full-year 2024 compared to 2023.

"Near perfect execution was required to meet the Company's ambitious 2024 plan," Aston Martin's new CEO, Adrian Hallmark, who took up his position on Sept. 1 having previously spent six years as chief executive at rival luxury car maker Bentley.

"It has become clear that we need to take decisive action to adjust our production volumes for 2024 given a combination of supplier disruption, the weak macroeconomic environment in China and a proactive decision to strategically re-align our production plans to optimise efficiency and achieve a more balanced delivery cadence in the future," Hallmark said.

Aston Martin, which was first founded in 1913 by English businessmen Lionel Martin and Robert Bamford, is best known for its expensive sports cars that became iconic after appearing in the 1964 James Bond film Goldfinger.

The Gaydon, Warwickshire headquartered company, whose cars are also used by Britain's royal family, floated on the London Stock Exchange in 2018 in an initial public offering that valued the manufacturer at GBP4.3 billion.

Aston Martin's shares have subsequently lost 97% of their value since the company's 2018 IPO, in a period in which it has had four different CEOs, including Hallmark, who succeeded former Ferrari chief executive Amedeo Felisa on Sept. 1.

-Louis Goss

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09-30-24 0440ET

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