On November 5, Italian luxury automaker Ferrari announced that in the third quarter of this year, its net revenue rose 6.5% year-on-year to 1.644 billion euros; adjusted EBITDA rose 10.3% year-on-year to 467 million U.S. dollars; adjusted EBITDA margin was as high as 28.4%, higher than that of the same period of the year-ago period of 27.4%; and adjusted net profit rose 13% year-on-year to 375 million U.S. dollars; Adjusted EBITDA rose 7 percent year-on-year to 638 million euros, slightly higher than analysts’ expectations.
However, in the third quarter of this year, Ferrari’s total car shipments fell 2% year-on-year, which disappointed investors who had expected Ferrari to show more resilience in the recent weak auto industry environment. The drop was mainly attributed to a 29 percent year-on-year decline in Ferrari’s deliveries in China, where the company’s market share is smaller than that of rivals such as Porsche.
Ferrari’s shares fell after the aforementioned earnings report, dropping as much as 7.2 percent, its biggest one-day drop since May 2021. However, Ferrari has less exposure to the Chinese market than other luxury automakers. Ferrari shares have still risen by about a third so far this year, outperforming rivals whose global sales have declined more significantly.
Premium automakers such as Mercedes-Benz Group, BMW Group and Volkswagen Group’s Porsche are all dealing with declining sales in China. Luxury automakers have issued a series of profit warnings as demand for high-end models in China has slowed.
Citi analysts, including Harald Hendrikse, said in a report that Ferrari’s performance in the third quarter of this year was “solid, but not spectacular,” with a slight slowdown in revenue growth. Ferrari also hasn’t yet faced broader demand issues, the analysts said, after it confirmed its full-year financial expectations.
Michael Dean, an analyst at Bloomberg Intelligence, said in a report that Ferrari’s results “underscore our positive outlook for super-luxury cars, which remains intact despite a slight shortfall in the company’s deliveries.”
Ferrari Chief Executive Benedetto Vigna is committed to keeping Ferrari’s lineup unique, relying on customization to boost profits. Last month, the company unveiled a €3.6 million supercar, one of its most expensive models ever.
Benedetto Vigna said more buyers are now willing to add customization to their cars and that pre-orders from China are already lined up for about five quarters.
Benedetto Vigna is a former executive at chipmaker STMicroelectronics NV. He is now pushing Ferrari to produce more electric cars. In September, he said Ferrari was on track to launch the brand’s first all-electric supercar, which is expected to go on sale in the fourth quarter of next year.