2024-05-05 20:12:22
After a loss-making first quarter, Sixt is cutting its annual forecast. Higher vehicle costs and falling residual values are to blame for the poor economy.
Sixt slipped into the red in the first quarter and has to cut its annual forecast. Accordingly, the car rental company’s shares have fallen by 14 percent and are now at 77.80 euros. This means they are at their lowest level in three and a half years and are heading towards their biggest price slide in two years.
The bottom line is that the car rental company from Pullach near Munich recorded a loss of 23.1 million euros, as it announced on Friday. That was around 45 million euros worse than in the same period last year. According to the company, higher vehicle costs in particular are to blame.
The reason for this is falling residual values – especially for electric cars. This means that Sixt has a harder time selling its rental cars after they have been used. The development has recently increased even further. The company was also impacted by poor economic prospects, high interest rates and falling market prices in some regions.
Sixt wants to get back into the black
Nevertheless, Sixt wants to get back into the black in the current second quarter. The pre-tax profit is expected to increase to 60 to 90 million euros. On the one hand, the first quarter is typically weak for the landlord, but on the other hand, “since the beginning of the year we have been working consistently throughout the company to optimize costs in all areas that we can influence and to further increase our efficiency,” as outgoing CFO Kai Andrejewski said .
In the second half of the year, Andrejewski’s designated successor, Franz Weinberger, expects “increased tailwind,” as he said. “We are also encouraged by the positive industry outlook for travel demand for the summer months, which accounts for the majority of our income.”
According to its new forecast, Sixt now expects a pre-tax profit of 350 to 450 million euros for the year as a whole. The company had previously promised 400 to 520 million euros. The forecast for sales has not been changed – it is expected to continue to grow significantly compared to last year’s 3.62 billion euros. In the first quarter, sales rose by a good 12 percent to 780 million, particularly strongly in North America and Germany.