Jaguar Land Rover said fiscal third-quarter profit growth stalled due to Evoque, currency shifts

Article by Christian A., on January 25, 2013

Jaguar Land Rover cited currency shifts and the popularity of its more affordable Evoque model as the reasons for the stagnation of its fiscal third-quarter profit growth. In a U.S. filing, the company said that earnings before interest, taxes, depreciation and amortization in the quarter through December likely matched figures for the previous two quarters.

It also said that the sales margin was probably a bit lower. Bloomberg said that in the two prior quarters, the margins of Jaguar Land Rover declined. The company said that the Ebitda performance reflects "less favorable exchange rates" and "the ongoing effect of a higher mix" of SUV sales. In the six months ended Sept. 30, the less expensive Evoque SUV made up nearly 30% of Land Rover's wholesale deliveries.

According to the brand's Web site, the SUV, which started deliveries in September 2011, is priced at slightly below 29,200 pounds ($46,300) compared to the 38,825-pound starting price for Land Rover's Discovery 4, a bigger SUV. Umesh Karne, an analyst with BRICS Securities Ltd. in Mumbai, said that the company is concerned about lower margins. He said that it is concerned about the suggestion that capital expenditure will be higher and also about negative cash flow as it factored positive cash flows into the share price.

In the year that started on April 1, Jaguar Land Rover could have negative free cash flow as the unit increases annual capital spending to 2.75 billion pounds from 2 billion pounds to create models and construct a plant in China. The unit said that free cash flow was likely also negative in the third quarter.

It said that the luxury division of India's Tata Motors, which has cash of 2.18 billion pounds, may raise more funds for investments from capital markets and through bank loans. The division said that detailed fiscal third-quarter figures will be divulged with Tata Motors' earnings statement this February.

Land Rover will soon unveil to the global public the five-door version of its new Land Rover Range Rover Evoque at the 2010 Los Angeles Auto Show on November 17, 2010. This new Land Rover Range Rover Evoque 5-Door is still as stylish and sporty in terms of looks as the standard version, but is able to offer higher levels of practicality and family appeal.

Just like the standard Land Rover Range Rover Evoque, the 5-Door stays true to the spirit of the innovative Land Rover LRX concept car as it also reinterprets the original cross-coupé design. In addition, the Land Rover Range Rover Evoque 5-Door also remains faithful to the core values of the Range Rover brand -- craftsmanship, luxury, performance and Land Rover all-terrain capability.

Land Rover Managing Director Phil Popham quipped that the inclusion of the 5-Door to Range Rover Evoque’s line-up further increases the appeal of the brand. He added that the 5-Door doesn’t only retain the strengths of the Range Rover Evoque coupé, but also provides greater levels of practicality, versatility and flexibility. Popham remarked that the launch of the new Evoque in 2011 is expected to expand and revitalize Range Rover’s global appeal.

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