General Motors – In the second quarter lost 760 million dollars, burned nine billion

The pandemic of the coronavirus strikes on the accounts of General Motors with all its virulence. The group of Detroit has paid dear consequences of a health emergency, closing the second quarter is not only heavy losses, but also with a heavy absorption of cash.

Data. Specifically, in the face of a sales decline of 34%, revenues decreased 53%, stopping to 16.8 billion dollars, while the operating result passed from the profit of 3.01 billion in the corresponding period of last year to a loss of 536 million, for a margin of -3,2% (was 11.5% a year ago). The net result is in the red of 758 million dollars, compared to profit of 2.42 billion in the past year, despite in the period, the group has received dividends of 500 million from the chinese branch, and to 400 million by the financial arm GM Financial.

Beats the expectations. Despite the consequences of the pandemic, the General Motors has still managed to make the best estimates definitely pessimistic of the market. Analysts, according to the consensus developed by FactSet, had put in prior to a loss of 1.77 per share, while the company has managed to limit the damage to a red of 50 cents. Similarly, the revenues of 16.8 billion are proved to be in excess of 16.2 billion expectations.

Burnt cash. Of the rest, the group in Detroit has launched several initiatives to contain the effects of the pandemic, including the cutting of salaries of the management, the reduction in costs for the advertising or postponement of the payment of bonus and company benefits. Nevertheless, the impact of the health emergency, the closure of plants and dealerships, and has shown his flow on the financial position: in the quarter, in fact, the activities automotive have recorded outflows of cash for the nine billion dollars, compared to the 11.6 billion of positive cash flow a year ago. The liquidity levels, thanks to the new lines of credit provided by the banks, however, remained solid and amounted to 30.6 billion. “Of course, – said the director of the financial Dhivya Suryadevara -the second quarter has represented a challenge for us, but we have almost reached the break-even operating in North America, despite being lost eight weeks on the 13 of production. These results demonstrate the ability of resistance and to generate the profitability of our business while we bring forward critical investments necessary for our future”.

The strategy electrical. In this regard, General Motors has done this starting in April of the construction of the battery factory of the joint venture with LG Chem to Lordstown, Ohio, and has confirmed a number of upcoming market launches: on August 6, will be unveiled the first electric Cadillac brand, the Lyriq, while between October and December, will debut the final versions of the Cruise’s Origin and the GMC Hummer EV. The three new electric are part of a larger plan that foresees investments of us $ 20 billion until 2025 for the development of vehicles to the plug, and advanced technologies for the autonomous guide.

Source: Quattroruote.en – Edited by Anthon K.