Nemak expects more volatility in 2020, but the automotive lightweighting solutions provider sees both disciplined spending and capitalizing on new trends as a practical countermeasure.

 

The company identified macroeconomic headwinds, evolving auto industry, and the closing of a Windsor, Ontario manufacturing facility by mid-year as hindrances in 2020. However, it plans to counter these headwinds by optimizing costs and focusing on value-added services in lightweighting and electrification. Last month, the first phase of a new Nemak facility for e-mobility applications was completed in North America. Production at this facility is expected to begin in H2 2020.

 

Nemak’s volumes declined in 2019 by 11.5pc to 44.3mn units from 50mn in 2018. In Q4 2019, the company’s volumes declined to 10.2mn units from 11.5mn units during the same quarter in 2018. The General Motors strike in the US, Nemak’s reduced shipments to China, and certain light-vehicles being phased out contributed to the company’s decreased production volumes.

 

The company’s revenue declined by 14.6pc in 2019 to $4.02bn from $4.79bn in the prior year. During Q4 2019, revenue totaled $941mn, down from $1.08bn in Q4 2018. Lower aluminum prices in tandem with currency also affected Nemak’s full-year and Q4 revenues.

 

In 2019, the company’s EBITDA of $621mn declined by 15.4pc from $734mn in 2018. During the Q4 2019, Nemak’s EBITDA was reduced to $133mn from $171mn during the same quarter in 2018. The firm’s net income of $130mn in 2019 declined by 27.8pc from $180mn in the prior year. In Q4 2019 net income totaled $31mn, 18.4pc below its Q4 2018 net income of $38mn.

 

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