Fiat Chrysler plunges to loss, scraps outlook on virus crisis

[May 05, 2020]  MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) plunged to a first-quarter loss of $1.8 billion and scrapped its full-year earnings forecast on Tuesday, as the automaker grapples with a coronavirus crisis that has hammered production and sales.

The Italian-American company, which has struck a binding merger deal with France's PSA Group <PEUP.PA> to create the world's fourth largest carmaker, said it remained committed to the tie-up, despite "unexpected and unprecedented times".

"Together, we continue to push ahead on the various merger workstreams and we remain committed to completing the transaction by the end of this year or early 2021," it said.

FCA <FCHA.MI> <FCAU.N> said it made a net loss from continuing operations of 1.69 billion euros ($1.83 billion) in the first quarter of this year. That compared with a 508 million euro net profit a year earlier.

"The pandemic has had, and continues to have, a significant impact on our operations," the company said in a statement.

However, FCA still made an operating profit, albeit 95% lower than a year earlier. Adjusted earnings before interest and tax (EBIT) amounted to 52 million euros.

FCA's Milan-listed shares extended their gains after the results were released and were up 1.4% at 1145 GMT.

 A car is displayed at the entrance of the FCA Italy headquarters, as FCA Mirafiori plant resumed its operations after closure during a lockdown amid the coronavirus disease (COVID-19) outbreak in Turin, Italy April 27, 2020. REUTERS/Massimo Pinca

The automaker said that due to the continued uncertainty related to the pandemic, it had withdrawn its full-year guidance and would update it when it had better visibility of the overall impact of the crisis.

In February, the group guided for an increase in adjusted EBIT to more than 7 billion euros this year and industrial free cash flow of over 2 billion euros.

In the first quarter, industrial free cash flow was around minus 5 billion euros. But FCA said it had available liquidity of 18.6 billion euros as of March 31, including a 6.25 billion revolving credit facility which was fully drawn down in April.

Liquidity was further strengthened last month with a new 3.5 billion euro incremental bridge credit facility, which remains fully undrawn.

"We continue to assess all funding options," FCA said.

(Reporting by Giulio Piovaccari, additional reporting by Stephen Jewkes, editing by Mark Potter)

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