SOAVE – Luxury sports carmaker Ferrari on Monday lowered its full-year earnings guidance significantly due to the COVID-19 pandemic, and acknowledged that the new outlook assumes a sharp recovery in the second half of the year.
Ferrari, which is based in the Emilia Romagna region that is one of the hardest-hit by the coronavirus in Italy, lowered its guidance for net revenues to between 3.4 billion euros and 3.6 billion euros from 4.1 billion euros previously. It cut its forecast for adjusted earnings before interest, taxes, depreciation and amortization to a top range of 1.2 billion euros from a top range of 1.43 billion euros.
The company reported an 8% drop in first-quarter net profit to 166 million euros as revenues dipped just 1% to 932 million euros amid a 5% increase in deliveries to 2,738 units.
CEO Louis Camilleri said the lowered guidance assumes that 75% to 100% of the lost earnings will be booked during the second quarter. It takes into account a seven-week disruption in production, which was relaunched Monday, and a projected drop in Formula 1 revenues due to the shortened calendar and plans to run many of the races without the presence of fans, which will hit both sponsorship fees and commercial rights. Branding revenues also are forecast to suffer with fewer visitors to Ferrari’s museum, amusement parks and shops.
CFO Antonio Picca Piccon said the guidance "does not take into account the risks of a severe second wave of infections, which is impossible to model.’’
Ferrari so far has not received significant cancelations in orders, but Camilleri said that during the 2008-9 financial crisis it took a few months for cancellations to affect the order books. He said there had been “several’’ cancelations in the United States and Australia but added "so far there are no red lights flashing in any geography."
“This crisis is very different," Camilleri said. "Possible cancellations are, however, only part of the equation. The other is the level of orders, which are OK.’’
Ferrari said it still intends to go ahead with the two car launches planned for this year, but they will be postponed until the second half.