Canadian manufacturer Martinrea posts record earnings despite challenging year
Canadian automotive metal parts supplier Martinrea International Inc. managed to post record earnings for both the fourth quarter and full year 2018 on strong sales despite a flat environment in terms of production, uncertainty for trade renegotiations and tariffs.
Fourth quarter net income totaled CA$37.8 million (US$28.2 million) on sales of CA$926.2 million (US$691 million). Full year net income was CA$185.9 million (US$138.7 million), also a record, on sales of CA$3.66 billion (US$2.73 billion).
The company said it earned new business awards of approximately CA$230 million (US$ 171.6 million) in annualized sales at peak volumes, including CA$190 million in lightweight structures with FCA, BMW and Toyota starting in 2021 and 2022, and CA$40 million in propulsion systems, including fluid management and engine products, for Volvo, Ford, Geely, Scania and JLR starting mainly in 2020.
New business awards totaled CA$800 million (US$596.9 million) in a full year basis.
“In 2018, not only did we have a record year in terms of financial performance, but we did so in an automotive environment that was fairly flat in terms of production in our key markets while experiencing some real challenges in terms of trade negotiations and tariffs,” said in a statement Executive Chairman Rob Wildeboer.
Sales for the fourth quarter of 2018 in the company’s North America operating segment increased by CA$61.0 million (US$45.5 million) or 9.0% to CA$735.9 million (US$549 million) from CA$674.9 million for the fourth quarter of 2017.
The increase was due to the launch of new programs during or subsequent to the fourth quarter of 2017, including the next generation GM Silverado/Sierra and RAM pick-up trucks, and the new Chevrolet Blazer.
Sales for the year ended December 31, 2018 in the company’s North America operating segment decreased by CA$86.3 million (US$64.4 million) or 3.0% to CA$2.83 billion (US$2.11 billion) from CA$2.91 billion for the year ended December 31, 2017.
The decrease was due to lower year-over-year production volumes on certain light-vehicle platforms including the Ford Escape, Ford Fusion, Chevrolet Malibu, Chrysler 300/Challenger/Charger, and programs that ended production during or subsequent to the year ended December 31, 2017 such as the previous version of the GM Equinox/Terrain.
Foreign exchange had a negative impact on overall sales for the year ended December 31, 2018 of approximately CA$21.1 million (US$15.7 million).
All these negative factors were partially offset by the launch of new programs during or subsequent to the year ended December 31, 2017, including the next generation GM Equinox/Terrain, GM Silverado/Sierra and RAM pick-up trucks, and the new Chevrolet Blazer; and an increase in tooling sales of CA$39.7 million (US$29.6 million).
Martinrea operates 10 manufacturing plants in Mexico. Two sites are located in Guanajuato, other production facilities are in Hermosillo, Sonora; Villa de Reyes, San Luis Potosi; Santa Rosa, Queretaro; Ramos Arizpe (2 plants) and Saltillo (3 plants), Coahuila.