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August 3, 2020

FCA books EUR1bn operating loss due to COVID-19

FCA said it contained the Q2 COVID-19 impact with a net operating loss of EUR1.0bn and adjusted EBIT of a EUR 0.9bn loss.

By Olly Wehring

FCA said it contained the Q2 COVID-19 impact with a net operating loss of EUR1.0bn and adjusted EBIT of a EUR 0.9bn loss.

North America was profitable though free cash flow were negative EUR4.9bn. Available liquidity at 30 June, 2020 of EUR17.5bn excluded an EUR4.5bn undrawn portion of the Intesa Sanpaolo loan facility. Results and operating cash flows significantly improved in June.

"Our second quarter showed that decisive actions and extraordinary contributions from our workforce enabled FCA to contain the impact of the COVID-19 crisis. While the company remains vigilant about the health and safety of employees, our plants are up and running, dealers are selling in showrooms and online, and we have the flexibility and financial strength to push ahead with our plans." said CEO Mike Manley.

The successful and safe restart of production in the closing weeks of May, together with cost control actions, yielded positive results for North America, with an adjusted EBIT of EUR39m. US consumer demand exceeded expectations and FCA improved US retail market share in the quarter. In addition, Dodge became the first domestic brand ever to achieve a top ranking in the annual JD Power Initial Quality Study.

In LATAM, FCA led the industry in vehicle sales for the first time, finishing the quarter with a market leading share of 15.9%. Driving the performance was the Brazil market where the group reached an industry leading market share of 19.8%, amid strong consumer demand for the pickup trucks and SUVs. The new Fiat Strada had its commercial launch at the end of June and is showing strong demand.

The EMEA region's manufacturing facilities steadily came back online during the quarter. As the consumer market continued to recover, much of the focus has shifted to the electrified vehicle introductions, with production started in the quarter, as well as the new full electric Fiat 500 to start, in the third quarter.

FAC said: "The COVID-19 crisis has further underlined the compelling logic of the Groupe PSA and FCA merger. Work by both teams towards the completion of the merger has continued apace and we expect to meet the objective of combining as a single company by the end of the first quarter of 2021.

"Antitrust approvals have already been granted by 12 of 22 jurisdictions.

"The review initiated by the European Commission is not expected to delay the merger timetable."

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