Fiat Chrysler Posts an Almost Complete Triumph for Q1 2018
Fiat Chrysler Automobiles (FCA) managed to significantly reduce its debts in the first quarter, putting the Italian-American conglomerate in the position to become cash positive by the end of the year.
The world’s seventh largest carmaker announced late last month that its debt fell to EUR1.3 billion by the end of the first quarter, well below the EUR2.6 billion forecasted by industry analysts.
Much of the success has been attributed to CEO Sergio Marchionne’s effective management. Marchionne is scheduled to depart the company in 2019, which has raised questions on who would be the ideal candidate to succeed him and continue his success.
Marchionne expressed a proud boast saying that the company can cancel all debt this year while generating EUR4 billion or USD5 billion in net cash by year’s end. The forecast does not yet account for any one-off measures nor the spin-off of parts maker Magneti Marelli, which Marchionne plans to enact before he leaves his post.
Despite the massive success, profits only rose 5 percent to EUR1.61 billion, lighter than the consensus forecast of EUR1.74 billion. The company’s failure to hit its target has been attributed to weak sales in the North American region.
Marchionne closed his announcement by saying that the FCA is preparing the next investment cycle as part of a new five-year business plan, the details of which he plans to lay out on June 1.