AutoCanada’s ups and downs
AutoCanada has reported its first-quarter earnings for 2020, citing “traction and momentum” through February followed by pandemic-impacted results for the last half of March.
Consolidated revenues of $708.8 million in the first quarter reflected a reduction of 4.1 percent over the prior year, while same-store new retail unit sales decreased by 16.9 percent as compared to the Canadian market decrease of 18.7 percent for brands represented by AutoCanada, as reported by DesRosiers Automotive Consultants.
The effects of COVID-19 on revenues in the last half of March—typically a stronger month than January and February, according to AutoCanada—drove adjusted EBITDA to $5.7 million, down $5.8 million from the prior year.
Net indebtedness also increased by $12.1 million from $157.9 million at the end of the fourth quarter of 2019 to $170 million at the end of Q1 2020. As of May 31, 2020, the company has reduced its overall net indebtedness by approximately $20 million, to $150 million.
Refinishing restructuring
PPG last week announced that it has approved significant and broad restructuring actions to reduce its global cost structure, citing the “broad economic impact” of the pandemic and further opportunities to optimize supply chain and functional costs.
The company will record a restructuring charge of US$160 million to US$180 million pretax, US$125 million to US$140 million after-tax, or US$0.52 to US$0.58 cents per diluted share in the second quarter of 2020.
Once completed, the company expects the planned actions will deliver between $160 and $170 million in annual pre-tax cost savings, with approximately $25 million to $35 million of savings projected in 2020.
PPG will provide further details during its second-quarter earnings update in July.
Up from April
DesRosiers Automotive Consultants says Canadian auto sales dropped by 44 percent in May, an improvement from the estimated 74.6 percent decline in April.
An estimated 113,224 new light vehicles were sold in May, up from 45,833 sold in April.
April was the largest single-month decrease in new vehicle sales on record—the lowest sales total seen in April since 1951, says DAC.
