Magna's 2006 sales rose 6%; profit dropped

By From autoindustry| Mar 01 2007
Share the:

Magna International Inc. reported financial results for the fourth quarter and year ended December 31, 2006 yesterday, with sales of $24.2 billion for 2006, an increase of 6% over 2005. The year-end results were issued just after the Canadian Auto Workers union President Buzz Hargrove revealed on 26 February that he had met Magna chairman Frank Stronach twice last week and talked about Chrysler, for which Magna assembles some models in Austria. Magna has been rumoured to be one of the potential bidders for Chrysler.

During 2006, Magna's North American and European average dollar content per vehicle increased by 6% and 14% respectively, though North American and European vehicle production volume declined 2% and 3% respectively.

Complete vehicle assembly sales increased by 7% to $4.4 billion for 2006 compared to $4.1 billion for 2005 and complete vehicle assembly volumes increased by 8% to approximately 248,000 units.

Operating profit was $792 million compared to $942 million for 2005, and net income of $528 million compared to $639 million in 2005. Diluted earnings per share were $4.78 for 2006 compared to $5.90 for 2005.

During 2006, the company generated cash from operations before changes in non-cash operating assets and liabilities of $1.44 billion, and generated $157 million from non-cash operating assets and liabilities. Total investment activities for 2006 were $1.18 billion, including $793 million in fixed asset additions, $284 million to purchase subsidiaries, and a $99 million increase in investments and other assets. Magna's board decided to reduce the dividend payable from that paid for 2005.

Vince Galifi, Magna Executive Vice President and CFO, commented: "The difficult automotive environment during 2006, particularly in North America, took its toll on our 2006 financial results. We believe it is prudent to review all uses of cash with an eye to maintaining our strong financial position in light of continuing industry challenges. Our Board's decision to adjust our dividend as a result of our reduction in profitability reflects this view."

Although the company has been mentioned as a prime contender among potential bidders for DaimlerChrysler's Chrysler Group, on which financial data have just been released by J.P. Morgan to selected parties, Magna's 2007 outlook statement assumes no significant acquisitions or divestitures.

Magna now employs about 83,000 employees in 229 manufacturing operations and 62 product development and engineering centres in 23 countries.

  • RSS
  • Newsletter
  • China News International News Data Commentary
Site Map

Copyright Notice © 2016 Gasgoo.com Corporation and its licensors. All rights reserved.