Automotive parts maker Martinrea expects demand for auto components to return by June, as car manufacturers around the world resume activities.
The Canadian company said it’s restarting its North American and European components plants this month in phases, and that they would be fully operational by the end of this quarter. Its Chinese operations, which resumed in late March, have returned to normal production levels, the company noted in its Q1 2020 earning report.
However, the firm withheld its guidance for subsequent quarters, citing uncertainty surrounding the pandemic and how that would play out across the countries in which it has a presence.
In Q1 2020, Martinrea’s sales declined commensurately with demand towards the end of the quarter, as some of its key customers—carmakers such as General Motors, Volkswagen, Ford, and Volvo—suspended operations in late March due to COVID-19, forcing the company to follow suit.
The company’s consolidated sales fell by 14.7pc to $872.7mn ($619.8mn) in Q1 2020 from $1.02bn during the same quarter last year. The decline last quarter was led by a 16pc drop in European sales, which declined to $159.9mn from $190.3mn in Q1 2019. The company’s sales in North America dropped by 15.2pc to $687.5mn in Q1 2020 from $811.1mn in the same quarter last year.
The aluminum auto parts maker reported it won new orders worth $35mn in late March and early April despite the widespread shutdowns. The company’s net income decreased by 47.6pc to $28.9mn last quarter from $55.2mn in Q1 2019, while its adjusted EBITDA declined by 19.6pc to $107.7mn in Q1 2020 from $133.9mn in Q1 2019.
($1 = C$1.40)