MILAN (Reuters) – A small profit in North America helped Fiat Chrysler Automobiles (FCA) to limit losses from the COVID-19 crisis in its second quarter, and the automaker forecast a “much, much better second half” ahead of its planned 2021 merger with France’s PSA Group.
The Italian-American maker of Fiats, Alfa Romeos, Jeeps and Rams said on Friday it slashed advertising costs and saw net prices rise in its key North American market, where it focused on retail sales over lower-margin fleet business.
It also cut capital expenditure across the group, and expects to reduce the total for the full year by 1.5 billion euros ($1.8 billion) to 8-8.5 billion euros.
FCA <FCHA.MI> posted an adjusted loss before interest and tax of 928 million euros for April-June, versus a forecast 1.87 billion euro loss in an analyst poll compiled by Reuters.
Earlier in the week, Ford Motor <F.N> reported a second-quarter operating loss of $1.9 billion. General Motors <GM.N> had an operating loss of $1.2 billion.
In North America, FCA <FCAU.N> made adjusted earnings before interest and tax of 39 million euros.
CEO Mike Manley said production in North America was back to pre-pandemic levels, apart from plants in Warren, Michigan and Toluca, Mexico, which are being retooled for new products.
“We expect a much, much better second half,” he told investors on a conference call.
Milan-listed FCA shares were up 1.5% at 1310 GMT, having been little changed before the results.
Manley said the group planned to launch a series of new Jeep models next year, including a new Wagoneer and Grand Wagoneer, and a redesigned Grand Cherokee.
Asked about electric pickup trucks coming from its competitors, Manley said FCA was “very committed” to electrifying its vehicles, adding: “Pickup trucks is a key franchise for us. We’re not going to sit on the sidelines.”
FCA, which is set to tie-up with Peugeot maker PSA <PEUP.PA> to create Stellantis, the world’s fourth largest carmaker, said an ongoing probe by European Commission competition authorities was not expected to delay the merger timetable.
Despite the pandemic, PSA earlier this week delivered a profit in the first half of the year.
FCA said its industrial free cash flow was minus 4.9 billion euros in the second quarter, with a slightly lower cash burn versus January-March.
It finished the quarter with liquidity of 17.5 billion euros. That does not include 4.5 billion euros still available on its loan facility. Ford had liquidity of $40 billion, and GM $31 billion.
(Additional reporting by Paul Lienert in Detroit; editing by Francesca Landini and Mark Potter)