JLR delivered a resilient performance in Q2 FY25 with an eighth successive profitable quarter, despite temporary aluminium supply constraints. First half profits increased by 25 per cent year‑on‑year.
Revenue for the quarter was £6.5 billion, down 6% versus Q2 FY24, while H1 revenue at £13.7 billion was flat year‑on‑year. Compared to the prior quarter, revenue was down 11%, reflecting lower wholesales as a result of supply disruptions from a key aluminium supplier restricting production in the quarter as well as a temporary hold placed on 6,029 vehicles to allow for additional quality control checks.
Profit before tax and exceptional items (“PBT”) in the quarter was £398 million, down from £442 million a year ago, while H1 profit before tax was £1,099 million, up 25% YoY.
EBIT margin was 5.1%, down 2.2 percentage points compared to Q2 FY24 while H1 EBIT margin was 7.1%. The decrease in profitability year‑on‑year reflects lower wholesales (as outlined above) and increased VME, FMI and selling costs, partially offset by prioritisation of Range Rover production and material cost improvement. Profit after tax (“PAT”) in the quarter was £283 million, compared to a profit of £272 million in the same quarter a year ago.
Free cash flow for the quarter was £(256) million, again reflecting constrained production and wholesale volumes. At the end of the quarter, the cash balance was £3.4 billion and net debt £1.2 billion, with gross debt of £4.6 billion. Net debt improved by £1.0 billion year‑on‑year, although it was £200m higher than Q1 FY25 due to the operating cash outflow in the period. Total liquidity was £4.9 billion, including the £1.5 billion undrawn revolving credit facility, which has been recently refinanced at £1.6 billion in October.
Looking ahead, both production and wholesale volumes are expected to pick up strongly in the second half of the financial year as the aluminium supply situation normalises, and we will continue our diligent management of costs. For the full year, our guidance is unchanged, with revenue of circa £30 billion, EBIT margin ≥8.5% EBIT and achieving a positive net cash position.
SOURCE: JLR
