- Westport Fuel Systems’ (TSX:WPRT) first quarter report of the year has been heavily impacted by the ongoing coronavirus pandemic
- The majority of the company’s operations in Italy were heavily disrupted during the quarter, due to pandemic and its accompanying operational restrictions
- Consequently, the company’s first quarter consolidated revenue dropped eight per cent to C$90.3 million, compared to last year’s same quarter
- Furthermore, Westport’s adjusted earnings before interest, taxes, depreciation, and amortization for the quarter sank to a loss of approximately $4.8 million
- Westport Fuel Systems (WPRT) is down six per cent and is trading at $1.31 per share
Technology company Westport Fuel Systems’ (TSX:WPRT) first quarter report of the year has been heavily impacted by the ongoing coronavirus pandemic.
The company admitted that the coronavirus was having an adverse impact on its business, including the disruption of production and customer demand.
Westport was in a particularly dire set of circumstances during the first quarter, as much of its production comes from three facilities in northern Italy.
Italy was one of the countries hit hardest by the coronavirus outbreak, with northern Italy at the epicentre of that outbreak.
Consequently, the company’s first quarter consolidated revenue dropped eight per cent to C$90.3 million, compares to last year’s same quarter.
The gross margin for the three months constricted by approximately $17.3 million to approximately $5.7 million. The company put this down to a $13.44 million payment it made for a field service campaign to replace a pressure release device.
However, the company stated insurance should cover around 70 per cent of the cost of this exercise, which was not recorded in the gross margin.
Westport’s adjusted earnings before interest, taxes, depreciation, and amortization in the quarter sank to a loss of approximately $4.8 million.
The company borrowed approximately $26.8 million during the quarter and embarked on a cost cutting mission across the business.
The company has managed to access approximately $5.3 million in wage subsidies to help it carry its workforce through the crisis.
Westport’s CEO, David Johnson said he was proud of how the company had reacted the coronavirus outbreak.
“While we expect the financial impact of COVID-19 to be more acute in the second quarter, due to the business and operational interruptions we experienced, the safe and efficient restart of production signals the start of recovery.
“Despite near-term uncertainty, macro trends and regulatory developments are proof points of persistent market fundamentals for our clean transportation solutions” he said.
Westport Fuel Systems (WPRT) is down six per cent and is trading at $1.31 per share at 2:45 pm EDT.
