- Magna International (MG) has revealed that its June quarter far exceeded any comparable quarterly declines experienced during the 2008 financial crisis
- The company saw a 58 per cent decrease in production and a C$6 billion fall in sales during the quarter
- Magna’s net income for the year was a loss of $647 million, compared to a profit of $452 million in last year’s June quarter
- Most of the company’s customers were forced to suspend production or produced at significantly reduced volumes, following the onset of the COVID-19 pandemic, causing the steep drop in sales
- Magna International (MG) is up 0.43 per cent and is trading at $65.59 per share
Magna International (MG) has revealed that its June quarter far exceeded any comparable quarterly declines experienced during the 2008 financial crisis.
The North American and European markets, the companies two most significant markets by production volume and percentage both experienced declines in vehicle production numbers.
Most of the company’s customers were forced to suspend production or produced at significantly reduced volumes, following the onset of the COVID-19 pandemic.
Consequently, Magna International experienced a 58 per cent decrease in production during the quarter, leading to a C$647 million quarterly net loss. Comparatively, the company’s 2019 second quarter net income was a profit of $452 million.
The substantial net loss resulted from a $6 billion fall in sales year-on-year, from $10.1 billion in 2019’s June quarter to $4.293 billion this year.
Don Walker, CEO of Magna said the second quarter results had been impacted by what he called a precipitous decline in global vehicle production caused by the COVID-19 pandemic.
“I am pleased we have been able to successfully and safety restart operations at our plants around the world. Additionally, we have taken several actions across the company to reduce our cost structurer to be aligned with our updated expectations for further vehicle production.
“We expect our second half 2020 results to begin to reflect these actions. I am confident that Magna will emerge from the recent economic upheaval as strong as ever,” he said.
Magna International (MG) is up 0.43 per cent and is trading at $65.59 per share at 1:45 pm EDT.