Polestar, a Swedish manufacturer of electric vehicles, announced on Friday that its third-quarter operating loss decreased from a year ago as revenue more than doubled. Polestar also reaffirmed its previous forecast of delivering 50,000 vehicles in 2022.
However, the business issued a warning that rising prices and supply-chain problems will continue to reduce its profits through 2023.
Following its merger with a special-purpose acquisition company in June, Polestar filed its first quarterly earnings report as a publicly traded company. These are the key figures from that report.
$435.4 million in revenue, compared to $212.9 million in the third quarter of 2021.
Operating loss decreased from $292.9 million to $196.4 million during the past year.
Due to an accounting credit associated with the devaluation of future share distributions, Polestar was nonetheless able to post a net profit of $299.4 million, or 14 cents per share, despite the operating loss. (Polestar will have to pay out less than it had anticipated because its share price has declined since it went public, hence the credit.)
After the revelation, shares spiked dramatically and ended Friday’s session up over 20%.
In his remarks on the results call, CEO Thomas Ingenlath stated, “I would want to reiterate: Polestar is a real automotive company.” We are currently getting cars on the road and achieving our ambitious growth strategy.
According to CFO Johan Malmqvist, Polestar’s attempts to cut costs, particularly temporary reductions in advertising and marketing expenditures, contributed to the company’s smaller operating loss. However, the loss was made worse by foreign exchange headwinds, which are predicted to persist throughout the following year.
Since our cars are made in China, the majority of our expenses are paid in renminbi, which has appreciated against the euro and other major currencies, raising the cost of sales, according to Malmqvist.
In line with its previous projections, Malmqvist stated that Polestar still anticipates shipping 50,000 vehicles in 2022 and earning $2.4 billion in total revenue.
According to those figures, deliveries of roughly 19,600 vehicles were made in the fourth quarter, bringing in nearly $924 million in revenue. These vehicles have already been produced and are currently being delivered to consumers, he added.
With around $988 million in cash at the end of the third quarter, Polestar has since obtained a $1.6 billion credit line from its two principal shareholders, Volvo Cars and Chinese automaker Geely. According to Malmqvist, that will be sufficient to support the business through 2023.