General Motors has reported a first quarter net loss of $6.0bn – its seventh quarterly loss in a row – saying the results “reflect continuation of the global economic downturn and lower industry-wide sales volume”.
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Losses were, however, partially offset by strong structural cost reductions due to “aggressive restructuring efforts”.
“Industry sales volume was down 21% globally in the first quarter versus the year-ago period, leading to significantly reduced volume and revenue for GM,” the automaker said in a statement.
The $6.0bn net loss including special items (-$9.78 per share) compared with the net loss of $3.3bn in Q1 2008. Excluding special items, GM reported an adjusted net loss of $5.9bn versus a net loss of $381m a year ago.
Special items and charges totalled to a loss of $73m and included a $906m gain on debt extinguishment and $385m related to GM’s portion of GMAC Financial Services’ (GMAC) gain associated with the accounting on its debt extinguishment offset by charges of $116m for restructuring, a charge of $822m related to Saab filing for reorganisation, and a charge of $291m in GM North America (GMNA) related to asset impairments. Charges of $135m were also booked for advances made under an agreement with Delphi which were written off as uncollectable.
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By GlobalDataFirst quarter revenue fell 47% to $22.4bn as vehicle production volume declined 40% to 903,000 units.
“Our first quarter results underscore the importance of executing GM’s revised viability plan, which goes further and faster to lower our break-even point,” said president and chief executive officer Fritz Henderson.
GM recorded an EBIT loss of $3.9bn for the first quarter compared with income of $808m a year ago.
Revenue fell in all regions and the results were also affected by unfavourable foreign currency rates. But GM said it had made “significant” structural cost improvements of $3.1bn year on year.
GM North America revenue fell 50% to $12.3bn on production volume down 58%. EBIT was a $2.8bn loss versus a $200m loss a year ago.
The losses were partially offset by a reduction in the accrual for residual support programmes for leased vehicles, primarily due to an improvement in residual values. In addition, GMNA said it had significantly reduced engineering and manufacturing cost in the first quarter.
Though GM Europe sales rose in Germany, it experienced a 46% decline in production volume, booking revenue of $2.4bn versus $5.3bn in 2008 and an EBIT loss of $1.2bn loss compared with a $200m profit last year.
Apart from China, where sales rose 17%, driven by strong SAIC-GM-Wuling performance and government stimulus measures, sales decreased in most countries across the region driving down production volumes and GM Asia-Pacific revenue. GM Daewoo revenue also dropped as export volumes declined significantly. Revenue was down to $2.4bn from $5.3bn in Q1 2008 and the EBIT loss of $21m compared with a $300m profit last year.
GM Latin America, Africa and Middle East posted sales increases in Ecuador and Peru in the first quarter and saw market share increases in Colombia, Ecuador, Chile, Peru, Venezuela, Egypt, Kenya and North Africa but production volume dropped 24% while unfavorable foreign currency exchange related mainly to the depreciation of the Brazilian real. Special restructuring charges were also booked in several countries.
Revenue fell to $3.4bn from $4.8bn and EBIT was down to $42m from $500m in Q1 2008.
On a standalone basis, GMAC reported a net loss of $675m for the first quarter of 2009, down $86m from a year ago. But GM booked a reported loss of $500m for the quarter as a result of its equity interest in GMAC.
GM’s cash and marketable securities totalled $11.6bn on 31 March, 2009, down from $14.2bn on 31 December, 2008.
The change in liquidity reflects negative adjusted operating cash flow of $10.2bn in the first quarter of 2009, which was partially offset by US TARP funding.
GM said it would further detail its current liquidity position and outlook in a Securities and Exchange filing “in the coming days”.
