Aston Martin Struggles with Profit Warning and Debt Issuance Amid Supply Chain Challenges

Profit Forecast Slashed as Supply Chain Woes and Sales Decline Impact Performance
Aston Martin Lagonda Global Holdings plc, the luxury British automaker, has announced a significant reduction in its earnings forecast for 2024, warning that adjusted EBITDA is expected to drop to £280 million (€336.2 million), down from £305.9 million (€367.3 million) in the previous year. This marks the second cut in earnings guidance within three months, signaling ongoing struggles faced by the company. The decline is primarily attributed to delays in the delivery of its exclusive Valiant models, as well as continued supply chain disruptions, particularly in China—a key market for the automaker.

The Valiant, a limited-edition model priced at around €2.37 million, was slated for delivery in 2024. However, Aston Martin now expects to deliver only half of the 38 Valiant cars initially planned, with the remaining models to be delivered in early 2025. These delays have further hampered the company’s already strained financial performance.

Electrification Strategy and Debt Issuance to Secure Future Growth
To address these financial setbacks, Aston Martin is raising £210 million (€252 million) through new debt and equity issuance. This move will provide liquidity of approximately £500 million (€600 million) by the end of the year, which will be directed towards the company’s electrification plans. Aston Martin aims to invest about £2 billion (€2.4 billion) in electrification initiatives between 2023 and 2027, as part of its long-term strategy to transition to electric vehicles.

CEO Adrian Hallmark, who was recently appointed, emphasized the importance of cost management and operational efficiency alongside electrification investments. He expressed confidence that these efforts would improve Aston Martin’s financial performance by 2025 and help the company meet its mid-term targets.

Investor Confidence Erodes Amid Market Challenges
Despite the launch of four new models in 2024, Aston Martin has faced significant challenges this year, particularly with the decline in Chinese sales, one of the carmaker’s most important markets. The company’s shares have fallen by over 50% year-to-date, reflecting investor concerns about its ability to recover from these setbacks. The full-year results for 2024 are set to be announced on 26 February 2025.