Fiat Chrysler blames Covid-19 as it crashes into the red

Fiat Chrysler Automobiles unveiled a slide into the red on Tuesday, after the Covid-19 pandemic and ensuing upheaval battered first-quarter trading.

The Italian-American car giant reported a net loss from continuing operations of €1.69bn, for a 433% collapse on last year’s net profit of €508m, and an adjusted net loss of €471m, down 183%. Net revenues fell 16% at €20.57bn.

FCA did, however, report adjusted earnings before interest and tax of €52m, although that was a 95% slide on the previous year’s figure.

The company conceded the Covid-19 pandemic had a “significant impact” on the results. The temporary suspension of production at all of its plants and a collapse in demand meant worldwide combined shipments fell 21% to 818,000 units.

In response, the group has delayed non-essential spending, “significantly” reduced marketing spend, and cut salaries.

A new €3.5bn incremental credit facility, structured as a bridge to capital markets, has also been secured. FCA said: “We continue to assess all funding options and expect to access funding as and when available on reasonable terms to further strengthen our balance sheet and enhance our liquidity.”

Nonetheless, the company insisted that its merger with France’s Groupe PSA would proceed, despite the disruption.

“Together we continue to push ahead on the various merger workstreams and we remained committed to completing the transaction by the end of this year or early 2021.”

The binding merger deal with PSA, which owns the Peugeot and Vauxhall brands, will create the world’s fourth-largest car maker.

Mike Manley, FCA chief executive, added: “With our experienced leadership team and dedicated employees, I have the utmost confidence in our ability to navigate through this crisis and emerge well-positioned to grow and prosper on the other side.”