Autoliv cuts 2022 forecasts as cost inflation bites, shares dive

·2-min read

By Helena Soderpalm

STOCKHOLM (Reuters) -Autoliv, the world's largest producer of airbags and seat belts, cut its full-year forecasts on Friday after reporting a first-quarter profit less than half the size expected by markets.

The auto industry, squeezed by supply-chain constraints and chip shortages, has been hit hard after Russia's invasion of Ukraine with Western sanctions pushing up the price of energy and raw materials.

The company's Sweden-listed shares, down 3.9% ahead of the report, were 11.7% lower by 1139 GMT.

Autoliv said adverse impacts on an already distressed global supply chain in the quarter had led to increased cost inflation and lower global light vehicle production.

The company now expects organic sales growth of around 12-17% in 2022, and an adjusted operating margin of about 5.5%-7.0%. Its previous forecast had been for 20% organic sales growth and a margin of about 9.5%, versus 8.3% last year.

"The reduction is worse than expected," investment bank Jefferies said in a note, adding it saw at least 20% downside to 2022 consensus.

Chief Executive Mikael Bratt said Autoliv's customers had on short notice seen lower volumes than they had previously indicated.

"We also see cost pressure on everything from raw materials to logistics, and energy prices also hit the quarter," he told Reuters.

"And we have a Covid situation still going on in the world and in the quarter we saw that affecting China."

Autoliv reported first-quarter adjusted operating profit of $68 million, down from $237 million in the year-ago quarter, and lagging a mean forecast for $149 million based on a poll of analysts published by the company.

It added that it expects second-quarter adjusted operating margin to be weaker than in the first quarter, as cost inflation will increase faster than cost compensations.

Russia accounted for less than 1% of Autoliv's sales in 2021.

(Reporting by Helena Soderpalm; Editing by Simon Johnson and Jane Merriman)

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