CT Automotive Group, a designer and supplier of interior components to the global automotive industry, said full-year adjusted profit before tax is now expected to fall between $4.9 million and $9.4 million, well below the $10.2 million the company believes the market had been forecasting.
Revenue for the six months to 30 June rose 14% to $61.7 million, from $54.1 million a year earlier, driven by demand and new programme launches at the Mexico facility. Adjusted profit before tax fell to $1.6 million in the first half, from $3.8 million in the prior-year period, as gross margin slipped to 27% from 30% amid freight costs, material inflation and Mexico ramp-up inefficiencies.
Net debt rose to $12.2 million at the half-year end, from $7.7 million at 31 December, reflecting delayed Mexican VAT recovery and reduced invoice financing after a key customer entered Chapter 11 administration.
The wide guidance range reflects $2.9 million of price increases the company is pursuing in full, against $1.6 million of further inefficiencies tied to tightening working capital linked to the same customer.
"CT Automotive is confident of a positive outcome" to the negotiations over cost escalation clauses, chief executive Simon Phillips said, adding that full-year revenue is not expected to be negatively impacted.
The board said it does not expect either extreme of the range to be the final outcome and will update the market as discussions conclude.
