New car delivery backlogs crimp Eagers Automotive profits


Mr Thornton said profit margins remained strong but there simply were not enough vehicles being sourced.

“This is due to the supply of new vehicles being impacted by multiple global events, largely attributable to the ongoing effects of semiconductor shortages in the industry,” he said.

The shortages had also been compounded by the Russian invasion of Ukraine and the new round of lockdowns in big Chinese cities such as Shanghai, which in turn have renewed supply chain disruptions.

This year, the company signed a distribution agreement to be the exclusive retailer in Australia for fast-growing Chinese electric vehicle maker BYD. 

Mr Thornton refers to BYD as being the biggest competitor in China to industry pioneer Tesla.

He said on Wednesday that BYD was currently the third-largest automotive group globally by market capitalisation. Tesla, led by Elon Musk, is the largest.

Eagers is taking a 49 per cent equity stake in a joint venture entity with BYD for Australia, and BYD’s first vehicles are due to go on sale in Australia in the second half of 2022, as it grapples with shipping and logistics disruptions.

Eagers, which held its annual meeting on Wednesday, said it expected an underlying operating profit before tax from continuing operations for the June half of between $183 million to $189 million. This compares with $215 million for the same time a year ago, on a like-for-like basis when acquisitions and divestments are stripped out.

On a statutory basis, net profit before tax from continuing operations for the half-year is expected to be in the range of $225 million to $240 million, compared with $267 million a year ago.

Mr Thornton said that if supply constraints eased, the second-half performance would be strong.

He said the company continued to transform its showroom model to keep up with the needs of modern-day buyers. It has just opened a large format retail operation called AutoMall West at the Indooroopilly Shopping Centre in the western suburbs of Brisbane.

The biggest shareholder in Eagers is Rich Lister Nick Politis, who is also the chairman of the Sydney Roosters in the National Rugby League competition. Mr Politis holds about 27 per cent of the company.


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