A strong finish to 2020 helped push Fiat Chrysler into the black with a $29 million net profit.
The former Fiat Chrysler Automobiles N.V. needed a $1.9 billion net profit during its final quarter to turn a net profit for the full year – its last as an independent company. The strong run at the end of the year pushed the company $29 million into the black.
It was a 99% drop in profits on a year-over-year basis.
FCA reported Q4 adjusted EBIT of $2.8 billion on revenues of $34.5 billion, as the industry enjoyed a rebound in sales due to the global pandemic. For the full year, the company’s adjusted EBIT came in at $4.5 billion, which was a drop of compared to a year. Revenue for 2020 fell 20% to $104.8 billion.
PSA fared better
Conversely, PSA posted $2.4 billion in consolidated income for 2020, which was down 44%, on $73.5 billion in revenue, down 19%. The French automaker reported an adjusted operating margin of 7.1% for the full year, and an even-better 9.4% for the second half of 2020.
The results made Carlos Tavares, CEO of the recently formed Stellantis, pretty happy.
Carlos Tavares, Stellantis’ new CEO, said the final financial results of the two companies shows the promise of the new partnership.
“These figures demonstrate the financial soundness of Stellantis, bringing together two strong and healthy companies. Stellantis gets off to a flying start and is fully focused on achieving the full promised synergies,” he said in a statement.
FCA hourly workers pleased
The UAW renegotiated its profit-sharing deal with FCA in 2019, and workers must be happy they did as they got a 10% increase with the new formula. Stellantis revealed that hourly workers in the U.S. will get an “eligible profit-sharing amount of $8,010 will be paid to UAW-represented employees on March 15, 2021.”
The amount of the actual payments varies, based on individual compensated hours. Approximately 43,000 employees are eligible to receive the payment, the company noted. With this payment, U.S. hourly employees have received on average more than $44,700 in profit sharing since 2009.
The 2020 profit sharing payment was calculated on the terms negotiated as part of the 2019 UAW-FCA Collective Bargaining Agreement, based on the year-end Adjusted EBIT margin of the North American region reported in the FCA legacy operations financial results.
UAW workers got $8,010 profit sharing checks for 2020.
FCA hammered by COVID-19
The company posted a record Q4 Adjusted EBIT, up 8%, with record Q4 margin, primarily due to favorable mix, positive net pricing and lower advertising costs, partially offset by lower volumes, higher recall campaign costs and negative foreign exchange translation effects.
The company’s decline — it originally forecast a best-ever $7.7 billion in pre-tax earnings for 2020 — came largely due to COVID-related problems, such as a massive drop in fleet sales combined with the slowdown in consumer purchases.
For the full year, industrial-free cash flow was down 70% to $755 million (624 million euro) from the start of 2020. Net financial expenses were $1.195 billion (988 million euro) in 2020, a 1.7% decrease. FCA’s earnings before interest and taxes in North America fell to $6.472 billion (5.5251 billion euro) in 2020. It posted an 8.9% margin in North America, slightly down from 9.1% in 2019 despite the eight-week production shutdown last spring.
