Jaguar Land Rover (JLR) has recorded a profit for the first time in 2020, citing a recovery from the impact of the pandemic-induced downturn that decimated its sales in the first quarter.
The manufacturer’s latest financial report shows that retail sales were up 53.3% in the second quarter of the year, with 113,569 cars sold.
The majority of JLR dealerships are now back in operation, following a near-universal shutdown that led to just over 74,000 units being sold in the first quarter.
Factors in the growth include a 14.6% quarterly increase in Chinese sales and strong demand for the new Land Rover Defender, which sold 4508 units in September alone.
Overall revenue generated from March to September – excluding that of JLR’s Chinese joint venture – totalled £4.4 billion, which is up 52.2% on Q1 but down 28.5% year on year as a result of the pandemic.
The firm recorded a £65 million pre-tax profit, compared to a loss of £413m in the previous quarter.
JLR lists “the recovery in sales, Project Charge+ cost efficiencies and favourable foreign exchange impact” as the driving forces behind its uptick. It also notes that profit margins were improved, with earnings before interest, taxes, depreciation and amortisation (EBITDA) at 11.0%.
Some £0.6bn was generated through savings as part of the company’s Project Charge+ transformation programme, which JLR says means it is “on track to achieve the £2.5bn target for the full year ending 31 March 2021”.
JLR’s chief financial officer, Adrian Mardell, said: “We were pleased to see sales, profitability and cash flow significantly improve in fiscal Q2 from the prior quarter. While sales and profitability haven’t fully recovered to pre-pandemic levels in most markets, it was particularly encouraging to see China sales up year on year and global sales of the new Land Rover Defender starting to ramp up.
“The Charge+ cost and cash efficiency programme also contributed significantly to the better results in the quarter. Charge+ remains on track to deliver £2.5bn of saving this year and, with continued strong liquidity, Jaguar Land Rover is well-placed to benefit from further market recovery in the second half and beyond.”
The firm expects sales to gradually improve following the introduction of the new short-wheelbase Defender 90, plus updated versions of the Range Rover Velar and Jaguar F-Pace, XE and XF.
In addition, the firm will launch another new plug-in hybrid model and a pair of new mild-hybrid options before the end of the year.
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