Autoliv reported a big increase in second-quarter adjusted profit on Friday as sales jumped on the back of product launches and higher prices.
Adjusted operating profit at the world’s largest airbag and seat belt maker rose over 70 percent to $212 million in the three-months ending June 30, from $124 million in the year-earlier period.
“We saw light vehicle production have a year-over-year improvement. We are also making progress in our negotiations with our customers around inflation compensation and raw material compensation,” CEO Mikael Bratt told Automotive News Europe. “That combined with our focus on reducing cost resulted in the strong adjusted EBIT improvement.”
Abnormally high cost inflation has squeezed Autoliv and other car industry suppliers in recent years, prompting tough price increase negotiations with their customers.
Separately, Bratt told Reuters that while he was happy with the results and believed momentum was picking up, the company was still not where it wanted to be on demand.
“I would say that due to the supply issues that have been in our industry, we have some way to go on the demand side,” he said.
Autoliv has in recent years struggled to keep up with high costs and recently said it hoped to turn things around by launching a cost-saving initiative that includes job cuts and the closure of several sites in Europe.
Bratt said the effects of the cuts and closures would be reflected in the company’s 2024 and 2025 financial figures.
Costs are expected to be reduced by about $25 million next year and about $55 million in 2025, the company said on Friday in relation to the savings.
Adjusted operating profit rose over 70 percent to $212 million in the three-months ending June 30, from $124 million in the year-earlier period.
The company reiterated its full-year outlook but said it expected its adjusted operating margin to be back-end loaded for the second half of the year due to normal seasonality between the third and fourth quarters.
Douglas A. Bolduc and Reuters contributed