Spyker, owner of Saab brand, reports large loss for 2010, sees profit only in 2012
Spyker Cars NV, owner of Saab Automobile, on Friday reported a large loss and growing debt in 2010, with chief executive Victor Muller saying a profit might only come in 2012.
In an earnings report, Spyker ignored its own branded luxury car figures — a small business which it is selling — and said the much larger Saab lost €218 million ($308 million) on sales of €819 million in 2010. That compares with a €400 million loss on sales of €1 billion in 2009, when it was part of General Motors Corp.
Spyker noted it sold 10,000 retail Saabs in the fourth quarter of 2010, continuing a steady upward trend within 2010, but didn't provide comparisons to 2009.
Investors, however, didn't like the figures and sent shares down 4.5 per cent to €4.78 in early Amsterdam trading.
The tiny Dutch company surprised markets in January 2010 by buying Saab out of liquidation from GM, a move that transformed the little-known Spyker into a proxy for an independent Saab.
Muller said Spyker won't turn a profit in 2011, but vowed to earn money in 2012 as new products come on line. He didn't explicitly reject his previous target of 80,000 cars sold in 2011, but stopped short of reconfirming it.
Muller declined to say how sales were shaping up in the first quarter of 2011, but said profitability was the focus.
"We are constantly being confronted with sales targets, and this is logical because they're easy to measure," he said on a conference call with reporters. "But I'd rather sell 50,000 cars and make a profit."
To help guarantee future growth, Spyker said it had sealed distribution partnerships in Russia and China, and that it was issuing 5.5 million in new shares, on top of 17.5 existing ordinary shares.
Spyker said it was seeking to cut costs and raise additional cash. It has €217 million remaining of a €400 million loan it received from the European Investment Bank — a loan guaranteed by the Swedish government.
Saab employs around 4,000 workers at its factory in Trollhattan, Sweden. On Friday, Saab's CEO Jan Ake Jonsson, 59, announced his retirement, with Muller assuming his functions pending a replacement.
Spkyer's net debt stood at €177 million at year-end, though that doesn't count all of the company's liabilities: in addition to the $74 million in cash Spyker paid GM for Saab, it also granted GM $329 million in preference shares that begin paying 12 per cent interest in 2013, assuming Saab is still operating then.
Analysts see disaster looming for the loss-making, debt-laden company, but Muller says most don't appreciate the fanaticism of Saab enthusiasts and the appeal of the company's brand, which he says was mismanaged under GM.
Muller said he expects to see the company's operations improve as it launches new models and as consumers gain confidence Saab is here to stay.
"The launch of new products, the real pivot in this business plan is the launch of the new 9-3 in October 2012. That' the tipping point," he said.
Spyker agreed in February to sell its tiny luxury sportscar business to Russian tycoon Vladimir Antonov for €15 million.
