French car parts maker Valeo on Tuesday posted slightly better than expected half-year core profit and reiterated full-year guidance, citing a projected increase in global car output.
Valeo’s half-year earnings before interest, tax, depreciation and amortisation fell nearly 8% year on year to 1.11 billion euros ($1.12 billion) but beat a company supplied analyst consensus forecast of 1.07 billion euros.
“The context has been difficult,” CEO Christophe Perillat told reporters, referring to microchip shortages that have dogged the automotive sector. However, he added that the chip situation “is improving”.
Additional pressures have come from rising costs in tight supply chains on which auto parts manufacturers rely to produce their components.
Valeo said in February that it expected a 2022 core profit margin in a range of 11.8-12.3%, down from 13.4% last year.
IHS Markit, which tracks data and predicts automotive production, this month forecast global production of light vehicles would hit 81 million this year, up from about 77 million in 2021. ($1 = 0.9872 euros)