MILAN (Reuters) - Demand for Ferrari's RACE.MI Portofino and 812 Superfast models helped the Italian supercar maker hit last year's profit targets though it only provided a cautious upgrade to its outlook for 2020.
Ferrari said the biggest increase in shipments in 2019 had come from China, Hong Kong and Taiwan but demand from the region slowed towards the end of the year.
Chief Executive Louis Camilleri said its performance was especially weak in Hong Kong and he did not rule out that the coronavirus outbreak might have an impact this year.
He said Ferrari could cope with slower orders from Asia, however, by speeding up deliveries of its supercars, which typically have waiting lists of least a year, to other parts of the world where demand was stronger.
“That’s the beauty of this company, we can offset it geographically,” Camilleri said. “I think we can offset weaknesses in China if it’s for a few months.”
Shipments to China, Hong Kong and Taiwan rose 20% last year to account for about 8% of overall deliveries, even though they slumped 65% in the fourth quarter of 2019.
Ferrari said it planned to boost adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to 1.38 billion-1.43 billion euros this year above a previous target 1.3 billion euros given in 2018, disappointing some.
Ferrari shares closed down 2.3% on the Milan stock exchange at 150.70 euros, though still not far off a record high of 158.7 euros hit less than two weeks ago.
Morgan Stanley analysts said the outlook was slightly below market expectations though they did not expect a material reaction in the share price, which has been riding high.
Ferrari - which is controlled by Italy's Agnelli family through Exor EXOR.MI - said adjusted EBITDA rose 22% in the last quarter of 2019 to 333 million euros ($368 million), just missing a forecast of 340 million in a Reuters poll.
Its fourth quarter results left 2019 profit at 1.269 billion euros, in line with an estimate of about 1.27 billion the company gave in November.
Its adjusted core profit margin came in at 33.7%: that’s short of a company’s target of 34%, but still a return most carmakers only dream of.
Ferrari plans to slow the roll-out of new cars in the coming years after releasing a record five new models in 2019, including the SF90 Stradale, the Prancing Horse’s first production hybrid in its range. Two new models are planned for this year, Camilleri told analysts on Tuesday.
The group has pledged to launch 15 models between 2019 and 2022, while achieving a significant increase in their average retail price.
In a bid to extract more growth, Ferrari launched a plan last year to enhance its brand through new clothing and accessory collections, entertainment offers and other luxury products and services.
The strategy includes a manufacturing agreement with Italian fashion house Giorgio Armani and the opening of a new restaurant with Michelin-starred chef Massimo Bottura in the company’s home town of Maranello in northern Italy in late 2022.
Reporting by Giulio Piovaccari; Additional reporting by Stephen Jewkes and Danilo Masoni; Editing by David Clarke
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