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(Alliance News) - TI Fluid Systems on Monday reported revenue growth and a swing to a profit in the first half of 2021, but warned that the chip shortage may affect its second-half performance.
The Oxford-based company makes products including brake fluids and fuel tanks for manufacturers of cars and other light vehicles.
Revenue rose 29% year-on-year to EUR1.52 billion from EUR1.18 billion. Pretax profit was EUR32.9 million, versus a loss of EUR352.7 million a year ago because of an impairment.
The company will pay an interim dividend of 1.93 cents per share, a return to a normal dividend policy of two payments per year worth 30% of adjusted net income. For 2020, the company paid out a total of 6.74 cents per share as one interim dividend.
Shares were down 1.9% to 309.50 pence in London on Monday morning.
In its outlook, TI Fluid Systems said IHS Markit's forecast for 82 million light vehicles to be produced globally in 2021, "may be optimistic given ongoing microchip and other supply related constraints."
But the FTSE 250 company kept its guidance for 2021 unchanged, saying it remains confident it will outperform global light vehicle production volumes. In March, TI Fluid Systems forecast its 2021 adjusted earnings before interest and tax margin to recover to a high single digit, and adjusted free cash flow to be "similar to pre-Covid 19 levels".
The first-half adjusted Ebit margin rose to 8.4% from 2.3%, while adjusted free cash flow was EUR46.3 million, up from EUR34.9 million.
"We continued to deliver strong revenue outperformance, robust profit and significant positive free cash flow generation despite headwinds from volatile production schedules caused by supply side shortages of microchips for our [original equipment manufacturer] customers," Chief Executive William Kozyra said.
By Ivan Edwards; ivanedwards@alliancenews.com
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