Ferrari Targets Profit Jump on $2.1 Million LaFerrari ApertaBy
Deliveries this year targeted at about 8,400 vehicles
Quarterly adjusted Ebitda surged 38%, pushing 2016 to record
Ferrari NV plans to increase profit by at least 8 percent this year with more special-edition supercars such as the $2.1 million LaFerrari Aperta, which helped revenue and earnings reach records in 2016. The shares rose to their highest price ever.
Adjusted earnings before interest, taxes, depreciation and amortization in 2017 will increase to more than 950 million euros ($1.02 billion) from the 880 million euros posted last year, the Italian manufacturer said Thursday in a statement. Fourth-quarter earnings on that basis surged 38 percent to 251 million euros, beating the average 224 million-euro estimate of seven analysts surveyed by Bloomberg.
Ferrari, which first sold shares to the public in late 2015 prior to its spinoff from Italian-U.S. automaker Fiat Chrysler Automobiles NV, is seeking to boost profit by offering top-priced, limited-production sports cars while widening its appeal with more affordable models such as the four-seat GT4Lusso. The company plans to raise annual production to 9,000 cars by 2019, compared with 8,014 deliveries in 2016. It expects to sell about 8,400 vehicles this year.
Ferrari stock jumped as much as 5.5 percent to 60.75 euros and was trading up 4.1 percent at 59.95 euros as of 3:44 p.m. in Milan, valuing the manufacturer at 11.6 billion euros.
“Profitability was a strong beat of estimates, as investors have been underestimating the product-mix impact of such a strong brand,” said Massimo Vecchio, an analyst at Mediobanca in Milan. “The same could be true again for the 2017 guidance, with profit higher than expectations.”
The company is building only 200 of the open-top variant of the LaFerrari, which was sold out before its public debut in September. Demand for the Aperta, whose purchasers include celebrity chef Gordon Ramsay, was triple the planned production run, and a U.S. collector sued Ferrari for not being selected to buy one. In addition to that model’s deliveries, Ferrari this year will bring out special-edition versions of its five-vehicle lineup, totaling 350 cars, to celebrate the company’s 70th anniversary.
The strategy is part of a push by Chief Executive Officer Sergio Marchionne, who also runs Fiat Chrysler, to woo the world’s elite even without the backing of a bigger industry player. While the brand’s ambitions to expand beyond exotic autos and challenge luxury powerhouses such as Hermes International and LVMH Moet Hennessy Louis Vuitton SE have so far failed to make headway, demand for its supercars has continued to rise.