Canadian supplier Martinrea International Inc. reported a fourth-quarter loss of 9.65 million Canadian dollars ($7.62 million) as the impact of the microchip shortage, rising inflation and costs related to new business launches dragged down results.
The quarterly loss compares with net income of CA$44.97 million ($35.47 million) a year earlier. Revenue for the quarter fell 1.6 percent to CA$1.05 billion ($831.1 million), Martinrea said.
Martinrea Executive Chairman Rob Wildeboer pinned the loss largely on the fallout of the COVID-19 pandemic, such as a semiconductor shortage that has hammered new-vehicle production over the last year and economic impacts including inflation.
“Arguably, the challenges we faced in 2021 were greater than the challenges we faced in the early days of the COVID-19 pandemic,” Wildeboer said on a Thursday call with analysts.
He said the company is also in the midst of launching the largest volume of new programs in its history, saying “elevated” launch costs contributed to the fourth-quarter results.
The decline in revenue was driven in large part by North American results, which fell 2.5 percent from a year earlier to CA$772.2 million ($608.5 million). Sales in Europe rose 1.9 percent from a year earlier.
Martinrea said its 2021 net income reached CA$35.88 million ($28.27 million), compared with a loss of CA$27.32 million ($21.56 million) in 2020. Annual sales rose 12 percent from a year earlier.
Wildeboer called 2022 a year of “renewed optimism” that pandemic-related financial headwinds might recede, boosting Martinrea’s financial performance and the industry’s overall health. Still, challenges persisted in early 2022, including the impacts of the Russian invasion of Ukraine and the fallout from protesters shutting down the vital Ambassador Bridge U.S.-Canada border crossing last month.
“Undoubtedly, there will be more challenges. We live in a troubled world,” Wildeboer said. “However, as we look forward, we believe there are reasons to be positive. Our fourth-quarter results were better than our third-quarter results, and we’re off to a good start in the early part of 2022.”
Martinrea ranks No. 73 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $2.45 billion in 2020.
