Magna grows sales in seating, but earnings shrink in 2018

Aurora, Ontario – Preliminary results from automotive seating and components company Magna show sales across the company grew by 11.6% in 2018 compared with 2017.

They reached $40.8 bn, compared with $36.5bn the year before. However, adjusted EBIT for the company remained almost unchanged at $3.1 bn. The company reports financial performance in US dollars.

'Looking forward, we are well positioned to continue to grow with our traditional customers as well as new entrants to the industry,' said Don Walker, Magna's CEO.

Magna's seating systems division includes complete seat assembly facilities, foam, trim, structures and mechanisms. That business converted sales of $5.5 bn in 2018 into adjusted EBIT of $425m. This is a 2.1% fall on adjusted EBIT of $434m in 2017. Divisional sales in 2017 were $5.2 bn.

However, things improved in the final quarter for the seating business at Magna. Sales rose by 10%, or $130 m, to $1.44 bn in the fourth quarter of 2018. This compares to $1.31 bn in the fourth quarter of 2017.

The increase was mainly a result of the launch of new car models, and higher production volumes in some existing programmes. These helped push the numbers ahead. However, they were partially offset by a $59 m currency hit. The Turkish lira, Canadian dollar, euro and Brazilian real all weakened against the US dollar.

Adjusted EBIT for seating systems grew from $106 m in the 2017 quarter to $110 m in the last quarter of 2018. Once again, currency effects hit the numbers, but there was a boost from a tax refund in Brazil, lower launch costs and better pricing.

Although the headline adjusted EBIT grew, the margin in the business shrank from 8.3% in the last quarter of 2017 to 7.7% for the fourth quarter of 2018, compared to 8.1% for the fourth quarter of 2017.