Stellantis Posts 11.8% Operating Profit In 2021

Stellantis beat its profitability target in the first year following its creation from the merger of Fiat Chrysler and Peugeot maker PSA, boosting hopes the automaker can cope with rising raw material costs and a shortage of semiconductor chips, Giulio Piovaccari and Gilles Guillaume reported for Reuters.

Photo Insert: The carmaker also said it expected to post a double-digit margin again this year.

Milan-listed shares in the world's No.4 carmaker were up 6.5% in Wednesday afternoon trading. The company, whose brands include Jeep, Ram, Opel, and Maserati, reported an adjusted operating profit margin of 11.8% in 2021, above its target of around 10%.

That was thanks to strong progress on synergies from the merger, which generated around 3.2 billion euros ($3.6 billion) in net cash benefits.

In a conference call with analysts, Chief Executive Carlos Tavares said the results demonstrated that "we are going to deliver on our commitments." The figures come less than a week before Stellantis presents a strategic plan for the next few years, which should among other things address its struggling business in China.

Tavares said he expected Chinese authorities would approve Stellantis' plans to increase its stake in its Chinese joint venture with Guangzhou Automobile Group (GAC).

The carmaker also said it expected to post a double-digit margin again this year. The pro-forma figure for 2020 was 6.9%. The outlook is "very vague, but it leaves room" for Stellantis to beat expectations, Banca Akros analyst Gabriele Gambarova wrote in a client note.

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