Auto Parts Maker Valeo Confirms Outlook, Expects Chip Shortage to Reduce | Invest News
PARIS (Reuters) – French auto parts maker Valeo on Thursday confirmed its financial outlook for 2021 as it posted increased sales and profits in the first half of the year, adding that it expected the shortage of key technology chips is easing.
Valeo’s first-half earnings before interest, taxes, depreciation and amortization (EBITDA) reached 1.21 billion euros ($ 1.41 billion) from 202 million a year earlier, while sales rose from 7.1 billion to around 9 billion euros.
“In a difficult environment marked by a shortage of electronic components and a rise in the prices of raw materials, we can confirm our objectives for the year 2021”, declared Jacques Aschenbroich, Chairman and CEO of Valeo.
Valeo’s 2021 financial outlook forecasts global automotive production growth of around 9%, sales of between 17.6 and 18.2 billion euros compared to 16.4 billion in 2020 and free cash flow of between 330 and 550 million euros, compared to 294 million in 2020.
Aschenbroich said he expected the global auto industry to be at the peak of chip shortage issues and that the situation would improve by the end of the year.
South Korean company Hyundai Motor also said this week that it expects the global chip shortage to become less acute in the second half of the year.
Semiconductors are essential in the production of integrated circuits or chips, and modern and technologically advanced cars use a multitude of sensors and controllers that rely on chips to send information throughout the vehicle. (reut.rs/3y2zdYH)
Earlier this week, Texas Instruments announced that it would increase its production capacity, which would alleviate problems related to the shortage of these tech chips.
(Report by Sudip Kar-Gupta, edited by David Goodman and David Evans)
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