Aurora, Ontario — The downturn in the global automotive industry caused by the pandemic in 2020 hit automotive seating and components company Magna hard. Earnings in its seating business were down 66.7% compared with 2019.
Coronavirus took 67% off Magna's seating earnings in 2020
Overall, the company, which reports in US$, generated sales of $23.6bn in 2020, down 40.0% on the previous financial year.
Adjusted EBIT across the business fell by 34.1% to $1.7bn in 2020. This compares with $2.5 bn in 2019, a drop of $869 m
CFO Vince Galifi said that in 2020, the company took steps to preserve cash and reduce costs, while continuing to invest for the future. ‘As vehicle production recovered in the second half, we proved our ability to generate strong cash flow,’ he said.
The company's seating systems business sales fell by 20.1% between 2019 and 2020, down to $4.4bn in 2020. Adjusted EBIT in the division was $107m in 2020.
In the fourth quarter of 2020, Magna said that the numbers in this business segment had been hit by lower production of the Chrysler Minivan, plus a $5m decrease in reported US dollar sales and net customer price concessions.
Adjusted EBIT in the quarter rose compared to the final quarter of 2019 to $85m. This was because the company squeezed costs out of the business, and there was better performance at an underperforming facility.