Sales from Magna International Mexican subsidiaries increase 7.5% in 2017

Canadian Tier 1 auto supplier Magna International Inc. posted 2017 results with records for sales, earnings per share, and operating cash flow, driven by higher sales in Europe and the launch of new cars for BMW and Jaguar.

The company posted record sales of US$ 10.39 billion for the quarter ended December 31, 2017, an increase of 12% over the fourth quarter of 2016. Magna sales from Mexican operations totaled US$ 1.4 billion in the fourth quarter, with US$ 1.26 billion accounting for external sales, up 10.7% and 12.4% respectively if compared to same period of 2016.

Magna established its first Mexico facility in Puebla in 1991. Currently, the company operates 30 manufacturing sites and a Research Center in Mexico. Together all facilities employ more than 29,000 workers. General Motors, Volkswagen, BMW and Ford Motor are among Magna’s biggest customers.

Magna also assembles cars under contract from automakers such as General Motor, Volkswagen AG, BMW and Ford Motor Company. During the fourth quarter its complete vehicle assembly sales increased 129% largely reflecting the 2017 launches of the BMW 5-Series and Jaguar E-Pace at its assembly facility in Graz, Austria.

During the fourth quarter of 2017, income from operations before income taxes was US$ 761 million, compared to US$ 646 million in the fourth quarter of 2016. Net income attributable to Magna International Inc. was US$ 556 million in the fourth quarter of 2017 compared to US$ 478 million in the fourth quarter of 2016. 

Adjusted EBIT in the fourth quarter of 2017 increased 16% to US$ 809 million, compared to US$ 696 million for the fourth quarter of 2016. 

For the year ended December 31, 2017, Magna posted record sales of US$ 38.95 billion, an increase of 7% from the year ended December 31, 2016. Full year sales from Mexican operations totaled US$ 5.5 billion, with US$ 4.86 billion accounting for external sales, representing increases of 7.5% and 6.1% respectively. 

Income from operations before income taxes was US$ 3.00 billion, an increase of US$ 219 million. Net income attributable to Magna International Inc. was US$ 2.21 billion and diluted earnings per share were US$ 5.90, increases of US$ 175 million and US$ 0.74, respectively, each compared to 2016. Adjusted EBIT increased 7% to US$ 3.11 billion in 2017, compared to US$ 2.90 billion for 2016. 

External production sales in North America was relatively unchanged at US$ 4.87 billion for the fourth quarter of 2017 compared to US$ 4.88 billion for the fourth quarter of 2016 while North American vehicle production volumes decreased 5%.

Lower production volumes on certain existing programs were substantially offset by the launch of new programs during or subsequent to the fourth quarter of 2016, including the Jeep Compass, Chevrolet Equinox and GMC Terrain, Volkswagen Atlas, Ford Expedition and Lincoln Navigator, and a US$ 67 million favorable impact due to the strengthening of the Canadian dollar against the U.S. dollar.

In North America, Adjusted EBIT decreased US$ 10 million to US$ 506 million for the fourth quarter of 2017 compared to US$ 516 million for the fourth quarter of 2016. The decrease was primarily due to customer settlements in the fourth quarter of 2017, higher pre-operating costs incurred at new facilities and reduced earnings on lower production sales partially offset by operational improvements, higher scrap steel recoveries, lower warranty costs, and an US$ 11 million favorable impact due to the strengthening of the Canadian dollar and Mexican peso, each against the U.S. dollar.

MexicoNow

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