By Giulio Piovaccari and Gilles Guillaume and Nick Carey
MILAN (Reuters) – Stellantis has surpassed its first-year profit target as a result of the merger of Fiat Chrysler and Peugeot maker PSA, raising hopes the automaker will succeed in dealing with rising raw material costs. raw materials and the shortage of semiconductor chips.
Shares of the company rose 4.4% on Wednesday in Milan.
The company, whose brands include Jeep, Fiat, Opel and Maserati, reported an adjusted operating profit margin of 11.8% in 2021, above the target of about 10%, thanks to progress on synergies from the merger, which generated about 3 .2 billion euros.
In a conference call with analysts, Chief Executive Carlos Tavares said he hoped Chinese officials would approve Stellantis’ plans to increase its stake in the Chinese joint venture with Guangzhou Automobile (GAC).
The automaker also expects to post a double-digit margin again this year. The pro forma value for 2020 was 6.9%.
Finance chief Richard Palmer told reporters that rising prices for raw materials such as metals will remain a problem for the industry this year, but a shortage of semiconductors, which has cost the group about 20% of production planned in 2021, peaked in the third quarter of 2021.
Palmer said cash synergies over the past year have put the group ahead of schedule to reach 80% of its €5 billion cost reduction target by 2024.
He added that Stellantis did not have significant direct exposure to Russia, which faces new international economic sanctions for its actions in Ukraine.
So far, Tavares has outlined a €30 billion electrification strategy and formed alliances with Amazon and Foxconn to accelerate software and semiconductor development for future connected vehicles.
In a separate statement, Stellantis said it would pay €1.9 billion in employee benefits based on last year’s results, a 70% increase over 2020.
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