Investing.com — Shares of Dowlais Group (LON:DWL) dropped on Tuesday after the company reported disappointing 1H24 earnings and reduced its full-year outlook, signaling mid-to-upper single-digit downside risk to consensus estimates, as per analysts at RBC Capital Markets.
“H1 was below our forecasts and the FY outlook reflects further reductions in industry forecasts and continued BEV related pressures such that the consensus downside risk is potentially mid-upper single digit based on revised guidance,” said analysts at RBC Capital markets in a note.
Dowlais Group reported 1H24 sales of £2,571 million, falling short of RBC Capital Markets’ estimate of £2,640 million. The company’s constant currency revenues declined by 5.1% year-over-year, compared to RBC’s expectation of a 3% decline.
This compares to Jefferies and consensus estimates of £2,566 million and £2,696 million, respectively. The company’s EBITA margin stood at 5.9%, in line with Jefferies’ estimates but 30 basis points lower year-over-year
Earnings per share (EPS) were reported at 4.9p, missing the RBC estimate of 6.0p. The group’s net debt to EBITDA ratio increased to 1.6x, up from 1.4x at the end of 2023.
The primary underperformance stemmed from the Automotive division, particularly the ePowertrain segment, which saw revenues decline by 20% amidst continued BEV-related pressures.
Despite global light vehicle production falling by 2.4% (excluding China), Dowlais’ Automotive revenues decreased by 6.3%, with core Driveline business declining by 1.4%. On the other hand, the Chinese market showed resilience, growing by 6.6% due to increased OEM share.
In contrast, the Powder Metallurgy (PM) division slightly outperformed market expectations with constant currency growth of 0.2% and a 50 basis point improvement in margins year-over-year. However, given the broader industry challenges, the overall impact on the group’s performance was negative.
Investing.com — Shares of Dowlais Group (LON:DWL) dropped on Tuesday after the company reported disappointing 1H24 earnings and reduced its full-year outlook, signaling mid-to-upper single-digit downside risk to consensus estimates, as per analysts at RBC Capital Markets.
“H1 was below our forecasts and the FY outlook reflects further reductions in industry forecasts and continued BEV related pressures such that the consensus downside risk is potentially mid-upper single digit based on revised guidance,” said analysts at RBC Capital markets in a note.
Dowlais Group reported 1H24 sales of £2,571 million, falling short of RBC Capital Markets’ estimate of £2,640 million. The company’s constant currency revenues declined by 5.1% year-over-year, compared to RBC’s expectation of a 3% decline.
This compares to Jefferies and consensus estimates of £2,566 million and £2,696 million, respectively. The company’s EBITA margin stood at 5.9%, in line with Jefferies’ estimates but 30 basis points lower year-over-year
Earnings per share (EPS) were reported at 4.9p, missing the RBC estimate of 6.0p. The group’s net debt to EBITDA ratio increased to 1.6x, up from 1.4x at the end of 2023.
The primary underperformance stemmed from the Automotive division, particularly the ePowertrain segment, which saw revenues decline by 20% amidst continued BEV-related pressures.
Despite global light vehicle production falling by 2.4% (excluding China), Dowlais’ Automotive revenues decreased by 6.3%, with core Driveline business declining by 1.4%. On the other hand, the Chinese market showed resilience, growing by 6.6% due to increased OEM share.
In contrast, the Powder Metallurgy (PM) division slightly outperformed market expectations with constant currency growth of 0.2% and a 50 basis point improvement in margins year-over-year. However, given the broader industry challenges, the overall impact on the group’s performance was negative.
