An employee works on an electric engine assembly line at automaker Stellantis plant in Tremery, eastern France, on January 27, 2022.
(Photo : ERIC PIERMONT/AFP via Getty Images)
Stellantis announced on Wednesday, February 23, that it posted incredible financial results in 2021, with the automotive giant tripling its net profit and doubling its operating income last year. Stellantis increased its net revenues compared with 2020 when it was still split between the FCA and PSA groups.
Stellantis made $15.2 billion in its first year after it was formed from the merger of Peugeot maker PSA Group and Fiat Chrysler Automobiles. That helped the company beat its profitability target, boosting hopes that it could cope with a shortage of semiconductor chips and rising costs of raw materials in 2022.
Shares of the world's No.4 carmaker listed in Milan surged during Wednesday afternoon's trading, going up 6.5 percent as investors reacted positively to the news. Stellantis, whose brands include Opel, Maserati, Jeep, and Ram, reported an adjusted operating profit margin of 11.8 percent in 2021, easily beating its target of around 10 percent.
Merger boosts Stellantis' 2021 profit
Stellantis managed to accomplish that feat thanks to solid progress on synergies from the merger in just its first year, generating around $3.6 billion (3.2 billion euros) in net cash benefits. Stellantis Chief Executive Carlos Tavares was delighted with his company's performance, telling analysts in a conference call that the results they posted demonstrated that they would deliver on their commitments.
The outstanding numbers come less than a week before Stellantis presents its much-awaited strategic plan for the next few years. One of the things to look out for in that plan reveal is how Stellantis will address its struggling car business in China, which holds the world's largest auto market.
Tavares said he expects Chinese authorities to approve Stellantis' plans to increase its stake in its joint venture with Guangzhou Automobile Group (GAC) in China. He also expects Stellantis to post another double-digit margin again this year.
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Stellantis distributes record profit-sharing payments
Margins in North America, where the company sells its highly-profitable Ram and Jeep pickup truck models, soared to a record 16.3 percent in 2021. That trumped rival General Motors' comparable margin in North America for 2021, which stood at just 10.2 percent.
Stellantis' profits for last year were up 179 percent compared to its numbers in 2020. The automaker cited strong sales and cost-cutting measures as the main reasons behind the increase in profits. Stellantis, consisting of 14 brands, including Vauxhall, Peugeot, Alfa Romeo, Citroën, DS, and Fiat, introduced ten new models in 2021 and 34 low-emission variants of existing models.
With revenues skyrocketing, Stellantis announced that it will distribute profit-sharing payments of almost $15,000 to all UAW-represented workers, the largest amount ever shared in its history. Tavares paid tribute to the workers, saying, "Every Stellantis employee took on an extraordinary task in 2021 of combining two automakers while facing serious external challenges."
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