Vince Galifi, Magna’s CFO, said: 'The second quarter of 2020 was among the most challenging that the auto industry has ever faced, resulting in our first normalised operating loss in over a decade. Nevertheless, we took important steps operationally and financially in the quarter to further strengthen our business.
He added that the updated 2020 financial outlook reflects its expectations of a solid recovery in earnings and cash flow in the second half of the year. The company has continued to pay dividends, and has repurchased shares in the half.
In the second quarter, Magna said that business shrank further and faster than during the 2008-09 financial crisis. This cut sales by $5.5.bn and adjusted EBIT by $1.4bn in the quarter.
In the seating systems business, sales plunged by 38% between the first half of 2019 and 2020, to $1.8bn. The company made a loss at the adjusted EBIT level of $44m.
CEO Don Walker said he was happy that the company had managed to successfully and safely restart operations at its plants around the world.
'[We have cut costs] to be aligned with our updated expectations for future vehicle production,' he said. 'We expect our second half results to begin to reflect these actions.'
Looking ahead, Magna said it believes total light vehicle sales will be around 12.5m units in the US, 15.9m units in Europe in 2020. This will give it between $30-32bn sales. The company expects its overall EBITDA margin will be between 2.9% and 3.3%.