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Africa|Aggregate|Automotive|Business|Financial|Freight|Logistics|Projects|Rental|supply-chain|Equipment
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africa|aggregate|automotive|business|financial|freight|logistics|projects|rental|supply chain|equipment

Motus reports rise in new-vehicle sales, flags ongoing supply chain constraints

25th January 2022

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

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Automotive group Motus expects to report a 20% to 26% year-on-year improvement in operating profit to between R2.1-billion and R2.2-billion for the six months ended December 31.

This translates into a profit before tax increase of between 40% to 50% year-on-year, rising from R1.28-billion for the six months to December 31, 2020, to between R1.8-billion and R1.93-billion.

As such, Motus projects that its earnings a share will increase from R5.07 apiece in the comparative 2020 period, to between R7.60 and R8.10 apiece for the period under review.

Motus’ headline earnings a share are also set to increase by between 45% and 55%, to between R7.63 and R8.15 apiece.

Regarding liquidity, Motus’ position remains strong, supported by significant unused banking facilities, while debt to equity levels remain below targeted levels, and are projected to end the period under review at below 35%.

The company plans to release its unaudited interim financial results for the six months on February 22, at which point an interim dividend will be considered.

Motus’ car rental business has been restructured and costs have been reduced accordingly. During December 2021, the fleet was increased to 17 200 vehicles (owned and leased) and it is estimated that it will, by June 2022, be about 15 500 vehicles (owned and leased).

“We are currently operating at utilisation levels in excess of 70%,” the company reports.

MARKET CONDITIONS

As for market conditions, the company reports that vehicle sales are continuing to recover despite the erratic vehicle supplies being experienced by original-equipment manufacturers.

This is backed up by the Automotive Business Council for South Africa, which finds that yearly aggregate industry new-vehicle sales in 2021 were 464 122 vehicles – up 22% from the 380 206 new vehicles sold in 2020.

Motus’ increased market share to date has been supported by an expansion of its vehicle model range, particularly in the growing entry-level and small to medium sport-utility-vehicle categories, coupled with new model launches.

In the UK, Motus points to the Society of Motor Manufacturers and Traders reporting yearly new-vehicle sales (excluding heavy commercial vehicles) to be slightly in excess of two-million vehicles in 2021, compared with 1.93-million in 2020.

Light commercial vehicle volumes were up by 21% at 355 380 vehicles in 2021, driven by an increase in home deliveries; while heavy commercial vehicle sales were up 13% at 37 163 vehicles in 2021.

In Australia, the Federal Chamber of Automotive Industries reported a 14.5% increase in yearly new-vehicle sales with 1.04-million units sold in 2021.

Nonetheless, Motus notes that global supply chain disruptions continue to impact the delivery of vehicles, panels and parts, with substantial increases in freight and logistics costs negatively impacting on operating margins.

However, Motus states that its four importer brands and 21 non-owned brands are in a fortunate position as they can rely on an extensive model range, enabling them to focus on available stock.

Going forward, Motus anticipates inventory supplies to normalise during the first quarter of its 2023 financial year.

As for the pre-owned vehicle market, Motus reports that, in 2021, there was strong demand for pre-owned vehicles across all geographies, on the back of the shortage of new vehicles.

However, the company also notes that this industry is experiencing a short supply of pre-owned vehicles from car rental companies, and has subsequently identified alternative sources of pre-owned vehicles.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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