Geely Earnings Miss Estimates as Lockdowns, Shortages Hit Sales

Chinese car maker Geely Automobile Holdings Ltd. reported first-half profit that missed analyst estimates as sales fell short of expectations — pummeled by Covid lockdowns and supply chain disruptions.

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(Bloomberg) — Chinese car maker Geely Automobile Holdings Ltd. reported first-half profit that missed analyst estimates as sales fell short of expectations — pummeled by Covid lockdowns and supply chain disruptions. 

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Net income dropped 35% to 1.55 billion yuan ($228 million) in the six months ended June 30 from a year earlier, the Hangzhou-based automaker said in a statement Thursday. That was less than estimates of 2.77 billion yuan, according to data compiled by Bloomberg. Revenue, however, increased 29% to 58.2 billion yuan, beating the estimated 53.2 billion yuan. 

For more details from the earnings report, click here

Geely, like many Chinese automakers, was hit by production outages and supply chain snarls caused by Shanghai’s two-month Covid lockdown. The automaker, controlled by Volvo Cars owner Li Shufu, delivered 613,842 vehicles in the first half, just over one-third of its initial annual target of 1.65 million. 

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“The group’s sales performance in the first half of 2022 was below management’s expectations, primarily attributable to the disruption to production and sales caused by the pandemic prevention and controls in some cities in China and global shortage of chips,” the company said in the statement. 

New-energy vehicles accounted for about one-fifth of first-half sales. A relative late-comer to the EV race, Geely, which used to have a comparable market size with BYD Co. before falling behind, is pushing hard to catch up. It has introduced standalone EV brands like Zeekr and last month unveiled an electric pickup truck marque, stepping into a sector with fairly low penetration in China.

Electric vehicles sales in China are forecast to hit a record 6 million this year as demand for cleaner cars surges, the China Passenger Car Association said earlier this month. They accounted for just over a quarter of all new car sales in July, the data showed.