The countdown to the accounts of the third quarter of Chrysler Fiat Automobiles is finished with confirmation – coming as surprise to some – with the target of 2014. The first quarter of the new Dutch company, formed by the merger between Lingotto and the US subsidiary Chrysler that made its debut on Wall Street October 13, is essentially in line with consensus.
For the number one Sergio Marchionne “accounts for the third quarter show solid performance despite difficult market conditions particularly in Latin America,” as he said in a statement.
Here are the numbers:
– Net income: 188 million, a decrease of 1 million, compared with estimates between 219 and 300 million euro
– EBIT: 926 million (+ 7%) against expectations between 960 million and 1.05 billion
– Net industrial debt: €11.4 billion, in line at the low expectations that were between €10.4 and and 10.8 billion
– Revenues: €23.6 billion over estimates ranging from an altitude €22.06 billion to €23.09 billion.
CEO Sergio Marchionne has surprised some analysts, who were not so sure that the targets for 2014 would be confirmed since the decline in sales in Europe and the company’s exposure to South America. FCA continues to estimate full-year operating profits to 3.6 billion to €4 billion, excluding special items, but the market is expecting a figure lower than the average fork: €.29 billion, down from he scored €3.5 billion in 2013. Revenues are expected by society with an increase of 7% to €93 billion, in line with the consensus deliveries to 4.7 million vehicles from 4.4 million units in 2013. In the first nine months it amounted to €3.55 million. The prospects for corporate industrial net debt are equal to €9.8 billion to €10.3 billion. Fiat traditionally used the third quarter to revise its guidance. It remains to be seen whether North America – the source of products for the group from which it derives more than half of total income – will be enough to offset the deterioration in performance in Brazil and braking Europe.
FCA prepares to spin off Ferrari list it at Stock Exchange in 2015. The board of directors of the Automotive Group reports it in a statement as part of a plan to build a capital structure appropriate to support the long-term development of the Group, authorized the separation of Ferrari by FCA. The operation “will be implemented through the public offering of a portion of the participation of FCA in Ferrrai equal to 10% of Ferrari and the distribution of the remaining interest of FCA in Ferrari to the shareholders of FCA.” The board has authorized the management to take the necessary action to complete these tasks in 2015. FCA expects Ferrari shares to be traded in the United States and in another European markets.
Fiat Chrysler is preparing to launch a convertible bond with a total value of up to 2.5 billion dollars. The placement will take place “by offering registered with the SEC and paid to US and international institutional investors.” The notes will be mandatorily converted into shares at maturity FCE, based on a conversion ratio, as well as other terms and conditions will be set at pricing. FCA expected that investors will participate in the offer shall be entitled to participate in the separation of Ferrari and receive shares of the prancing horse. The company expects to complete the deal by the end of 2014, although the timing “remains subject to market conditions and regulatory requirements applicable to the recording.”
Through these operations, the Group expects to finance the nearly $60 billion needed in the next five years to boost its line of models and make Alfa Romeo and Jeep global brands. Marchionne had repeatedly said that the money is there and that a capital increase is not necessary. But to be sure, had said on October 13th, could be used to issue bonds or new shares.
The board of FCA authorized the offering of 100 million shares, “including 35 million and 54 million shares of common stock to replenish the capital of the shares canceled as a result of exercising the right of withdrawal on the part of Fiat shareholders” in the merger with Chrysler. The shares subject to withdrawal, the statement of the company, have been redeemed and canceled.
In discussions of financial planning in support of the business plan 2014-2018, the Board of Directors FCA “reaffirmed its intention to eliminate any contractual agreement limiting the flow of funds between companies in the group.” As a result, “FCA expects to prepay the issued bonds of Chrysler not later than the first optional redemption date of June 2015 for the Senior Secured Notes due 2019 with 8% interest and in June 2016 for those maturing in 2021 with interest of 8.25%.”