UPDATE 3-Spyker sees further losses, cuts 2010 target

Fri Oct 29, 2010 5:37am EDT

* Cuts 2010 sales target, keeps 2011/12

* Q3 operating loss 50 million euros vs 3.4 mln loss yr ago

* Negative equity 169 mln, sees no need to recapitalise

* Still plans Stockholm listing

* Spyker shares fall 22 pct to 3.1 euros, index down 0.2 pct

(Adds details from conference call, share and analyst reaction)

By Marcel Michelson

AMSTERDAM, Oct 29 (Reuters) - Spyker SPYKR.AS, the loss-making Dutch sports car maker, which acquired much larger Saab earlier this year, sees no escape from losses until 2012 as it ramps up sales of the Swedish premium brand.

Saab's production was severely disrupted, and its sales target cut to 30,000-35,000 units, from 45,000 previously, because it had to rebuild its supplier base after the deal.

The group said on Friday it was turning to Russia and China to sell a range of new premium Saab models, including a sports utility vehicle, and a pick-up truck, that would generate higher margins than under General Motors ownership.

Spyker shares, which are very volatile, fell sharply, and traded 22.3 percent lower at 3.05 euros by 0915 GMT, compared with a 52-week high of 6.8 euros on Jan. 27, and a low of 1.49 euros on Nov. 6, 2009. The share made big gains following the September announcement of an engine pact with BMW.

The auto index .SXAP was down 0.15 percent.

Saab's new 9-5 model is positioned to rival the Audi (VOWG.DE) and BMW (BMWG.DE) 5 series, and Saab has reintroduced this model to showrooms in Canada, and the United States after it separated from GM. The 2011 version of the 9-5 will have more engine versions, such as diesel, and other options.

2011 TARGET

The group is sticking to its 2011 target of 80,000 cars and a 2012 goal of 120,000, which group Chief Executive Victor Muller called "conservative" and "realistic".

Saab Chief Executive Jan Ake Jonsson said the sales momentum was improving and he was confident of being in the black in 2012.

"The key thing is to have models in the showroom, customers will come when they actually see the cars on the street, and at the dealerships," Muller told a conference call, adding the Spyker activities made up only 1-1.5 percent of the group.

He said the group was planning a Stockholm secondary listing in April, and could eventually leave the Amsterdam Bourse.

The former Spyker sports car activities would have to become profitable as well, as Muller said the group could not afford "hobbies".

He said there was no plan to issue shares, to prevent dilution of current investors. Muller, Abu Dhabi fund Mubadala and Gemini Investment Fund hold 61.4 percent in total.

"Investors have probably been too enthusiastic on the spur of the moment," said Theodoor Gilissen analyst Tom Muller.

Martin Crum of AEK said the downgrade of the 2010 sales target was "sharp" and would affect the full-year results.

CASH IS KING

Spyker said it expected to end 2010 with sufficient liquidity to support its operations, and saw no need to recapitalise despite a negative equity position under IFRS accounting rules related to the classification of redeemable preference shares as debt instead of equity.

At the end of the third quarter, liquidity was 450 million euros, including undrawn European Investment Bank facilities of 255 million euros.

Spyker posted a third-quarter operating loss of 50 million euros on sales of 275 million euros, and had a cash outflow of 115 million euros over the first nine months. The nine-month loss was 159 million euros.

Spyker said it was still finalising its valuation of the Saab assets, and that it was "not unreasonable" to expect the value to be adjusted upwards. Spyker bought Saab for a total of $400 million in February, of which $74 million in cash. (Additional reporting by Gilbert Kreijger; Editing by Sara Webb and Sharon Lindores) ($1=.7205 Euro)

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