Nemak posted a net loss of $125 million in the second quarter compared with a gain of $42 million a year earlier as the supplier halted production for about eight weeks amid the coronavirus pandemic.
But Nemak said that its earnings before interest, taxes and other adjustments would have remained stable at $1 million if adjusted for nonrecurring severance expenses, crediting “additional operational efficiencies.”
The powertrain and body structure components supplier said it still managed to win about $150 million in new business to produce e-mobility, structural and powertrain applications.
Nemak is one of several auto suppliers that are releasing second-quarter earnings in the coming weeks. Industry insiders will be watching to assess the full impact of the crisis on the automotive supply chain, which has largely remained financially viable so far.
Nemak said revenue for the quarter plunged 60 percent to $403 million due to light-vehicle production shutdowns related to the pandemic.
In North America, revenue fell 67 percent to $182 million. EBITDA fell to negative $24 million from $100 million.
In Europe, revenue dropped by nearly 58 percent to $156 million, while EBITDA fell to negative $16 million from $59 million.
CEO Armando Tamez said in a statement that the company had established a global communication and training program to ensure employee safety. He also said Nemak changed its cost structure and took action on the financial side, such as canceling dividend payments for the remainder of the year and amending loan agreements.
“I am confident that our progress on the above-mentioned fronts will help us to successfully navigate these extraordinary times and lay an even stronger foundation for growth and financial resiliency over the long run,” Tamez said.
Nemak said it restarted operations at its North American and European plants in May after shutdowns that lasted an average of eight weeks.
Nemak, of Garcia, Mexico, ranks No. 58 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $4.02 billion in 2019.