A weakening of certain currencies against the US dollar, in particular the euro and Canadian dollar, had a significant negative impact on Magna revenue

A weakening of certain currencies against the US dollar, in particular the euro and Canadian dollar, had a significant negative impact on Magna revenue

Magna has posted second quarter sales down 9% to US$8.1bn with a weakening of certain currencies against the US dollar reporting currency, in particular the euro and Canadian dollar, having a significant negative impact.

Foreign currency translation reduced sales by around US$890m compared to the second quarter of 2014. 

Excluding the impact of foreign currency translation, sales increased 1% in the second quarter.

North American light vehicle production increased 3% to 4.6m units and European light vehicle production increased marginally to 5.4m units in the second quarter.

Magna complete vehicle assembly sales decreased 8%, while complete vehicle assembly volumes fell 17% to around 28,500 units.

During the second quarter of 2015, income from continuing operations before income taxes was US$726m, while net income from continuing operations was US$538m.

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Results

Please click HERE for a PDF version of the release.

AURORA, ON, Aug. 7, 2015 /CNW/ - Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the second quarter ended June 30, 2015.

 

                         
    THREE MONTHS ENDED 
JUNE 30,
  SIX MONTHS ENDED 
JUNE 30,
      2015     2014     2015     2014
                         
Sales   $  8,133   $  8,911   $  15,905   $  17,366
                         
Adjusted EBIT(1)   $  677   $  722   $  1,308   $  1,340
                         
Income from continuing operations before                        
  income taxes   $  726   $  704   1,347   $  1,298
                         
Net income from continuing operations                        
  attributable to Magna International Inc.   $  538   $  519   $  993   $  921
                         
Diluted earnings per share                        
  from continuing operations   $  1.29   $  1.18   $  2.39   $  2.08
                         
All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars. 

(1) Adjusted EBIT is the measure of segment profit or loss as reported in the Company's attached unaudited interim consolidated financial statements.
Adjusted EBIT represents income from operations before income taxes; interest expense, net; and other expense, net.

 

BASIS OF PRESENTATION

In the second quarter of 2015, we signed an agreement to sell substantially all of our interiors operations to Grupo Antolin, a leading global supplier of automotive interior systems. The purchase price for the operations, excluding certain assets, is approximately$525 million, subject to customary closing adjustments. We will continue managing our seating operations which are not included in this arrangement. The assets and liabilities, and operating results for the previously reported interiors operations are presented as discontinued operations, and have therefore been excluded from continuing operations for all periods presented in this press release.

THREE MONTHS ENDED JUNE 30, 2015

We posted sales of $8.1 billion for the second quarter ended June 30, 2015, a decrease of 9% from the second quarter of 2014. The weakening of certain currencies against our U.S. dollar reporting currency, in particular the euro and Canadian dollar, had a significant negative impact on our reported sales for the second quarter of 2015.  Foreign currency translation reduced our sales by approximately $890 million, as compared to the second quarter of 2014.  Excluding the impact of foreign currency translation, our sales increased 1% in the second quarter of 2015, compared to the second quarter of 2014.  North American light vehicle production increased 3% to 4.6 million units and European light vehicle production increased marginally to 5.4 million units in the second quarter of 2015, compared to the second quarter of 2014.

Excluding the impact of foreign currency translation, our complete vehicle assembly sales decreased 8% in the second quarter of 2015, compared to the second quarter of 2014.  Complete vehicle assembly volumes decreased 17% to approximately 28,500 units.

During the second quarter of 2015, income from continuing operations before income taxes was $726 million, net income from continuing operations was $538 million and diluted earnings per share from continuing operations were $1.29, increases of $22 million, $19 million and $0.11 respectively, each compared to the second quarter of 2014.

For the second quarter of 2015, other (income) expense positively impacted income from continuing operations before income taxes by $57 million, net income from continuing operations attributable to Magna International Inc. by $42 million, and diluted earnings per share from continuing operations by $0.10, respectively.

For the second quarter of 2014, other (income) expense negatively impacted income from continuing operations before income taxes by $11 million, net income from continuing operations attributable to Magna International Inc. by $10 million, and diluted earnings per share from continuing operations by $0.02, respectively.

During the second quarter ended June 30, 2015, we generated cash from operations of $711 million before changes in operating assets and liabilities, and invested $271 million in operating assets and liabilities. Total investment activities for the second quarter of 2015 were $402 million, including $361 million in fixed asset additions and $41 million in investments and other assets.

SIX MONTHS ENDED JUNE 30, 2015

We posted sales of $15.9 billion for the six months ended June 30, 2015, a decrease of 8% from the six months ended June 30, 2014. The weakening of certain currencies against our U.S. dollar reporting currency, in particular the euro and Canadian dollar, had a significant negative impact on our reported sales for the first six months of 2015.  Foreign currency translation reduced our sales by approximately $1.7 billion, as compared to the first six months of 2014.  Excluding the impact of foreign currency translation, our sales increased 2% in the first six months of 2015, compared to the first six months of 2014.

During the six months ended June 30, 2015, vehicle production increased 1% to 8.7 million units in North America and increased 1% to 10.6 million units in Europe, each compared to the first six months of 2014.

Excluding the impact of foreign currency translation, our complete vehicle assembly sales decreased 10% in the first six months of 2015, compared to the first six months of 2014.  Complete vehicle assembly volumes decreased 20% to approximately 56,000 units.

During the six months ended June 30, 2015, income from continuing operations before income taxes was $1.4 billion, net income from continuing operations was $993 million and diluted earnings per share from continuing operations were $2.39, increases of $49 million, $72 million and $0.31, respectively, each compared to the first six months of 2014.

For the six months ended June 30, 2015, other (income) expense positively impacted income from continuing operations before income taxes by $57 million, net income from continuing operations attributable to Magna International Inc. by $42 million, and diluted earnings per share from continuing operations by $0.10, respectively.

For the six months ended June 30, 2014, other (income) expense negatively impacted income from continuing operations before income taxes by $33 million.  In addition, for the six months ended June 30, 2014, other (income) expense and the impact of the Austrian tax reform together negatively impacted net income from continuing operations attributable to Magna International Inc. by$62 million, and diluted earnings per share from continuing operations by $0.14, respectively.

During the six months ended June 30, 2015, we generated cash from operations before changes in operating assets and liabilities of$1.3 billion, and invested $620 million in operating assets and liabilities. Total investment activities for the first six months of 2015 were $706 million, including $627 million in fixed asset additions, $78 million in investments and other assets and $1 million to purchase subsidiaries.

A more detailed discussion of our consolidated financial results for the second quarter and six months ended June 30, 2015 is contained in the Management's Discussion and Analysis of Results of Operations and Financial Position and the unaudited interim consolidated financial statements and notes thereto, which are attached to this Press Release.

DIVIDENDS

Yesterday, our Board of Directors declared a quarterly dividend of $0.22 with respect to our outstanding Common Shares for the quarter ended June 30, 2015. This dividend is payable on September 11, 2015 to shareholders of record on August 28, 2015.

UPDATED 2015 OUTLOOK

The table below reflects our 2015 outlook and 2014 actual results, both from continuing operations:

             
             
      2015 Outlook     2014 Actual
Light Vehicle Production (Units)          
  North America     17.4 million     17.0 million
  Europe     20.3 million     20.1 million
             
Production Sales          
  North America     $17.3 - $17.9 billion     $17.4 billion
  Europe     $6.8 - $7.2 billion     $8.8 billion
  Asia     $1.6 - $1.8 billion     $1.6 billion
  Rest of World     $0.5 - $0.6 billion     $0.7 billion
  Total Production Sales     $26.2 - $27.5 billion     $28.5 billion
             
Complete Vehicle Assembly Sales     $2.2 - $2.5 billion     $3.2 billion
             
Total Sales     $30.9 - $32.6 billion     $34.4 billion
             
Operating Margin(1)     Approximately 8%     7.7%
             
Tax Rate(1)     Approximately 26%     25.0%
             
Capital Spending     $1.3 - $1.5 billion     $1.5 billion
             
(1) Excluding other (income) expense, net

 

In this 2015 outlook, in addition to 2015 light vehicle production, we have assumed no material acquisitions or divestitures other than the divestiture of substantially all of our interior operations as discussed above. In addition, we have assumed that foreign exchange rates for the most common currencies in which we conduct business relative to our U.S. dollar reporting currency will approximate current rates.

ABOUT MAGNA

We are a leading global automotive supplier with 319 manufacturing operations and 85 product development, engineering and sales centres in 29 countries.  We have over 136,000 employees focused on delivering superior value to our customers through innovative products and processes, and World Class Manufacturing.  Our product capabilities include producing body, chassis, interior, exterior, seating, powertrain, electronic, vision, closure and roof systems and modules, as well as complete vehicle engineering and contract manufacturing.  Our Common Shares trade on the Toronto Stock Exchange (MG) and the New York Stock Exchange(MGA).  For further information about Magna, visit our website at www.magna.com.

Original source: http://www.magna.com/media/press-releases-news/news-page/2015/08/07/press-release---magna-announces-second-quarter-and-year-to-date-results

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