Magna feels impact of U.S. dollar, sees revenue dip seven per cent in 2015
by The Canadian Press
Despite revenue decline, company hiked its dividend for sixth straight year
The cost of currency exchange shaved $3.35 billion off Magna’s bottom line in 2015.
AURORA, Ont.—Magna International Inc. says the strong American dollar had a significant negative impact on its revenue last year, which was down seven per cent from 2014.
The Canadian autoparts giant, which reports in U.S. dollars, says its full-year sales for 2015 were $32.1 billion—down from $34.4 billion in 2014.
The impact of foreign currency translations shaved $3.35 billion from the value of Magna’s sales last year and, without that, last year would have been up three per cent from 2014.
In the final quarter of last year, Magna’s sales were $8.6 billion, down three per cent from $8.8 billion a year earlier. That included a $770-million hit from the weaker Canadian dollar and the euro against the U.S. dollar.
Magna also saw a decline in sales for assembling complete vehicles for its customers.
In 2015, Magna saw assembly volume drop 23 per cent to 104,000 units and revenue fall 25 per cent to $2.36 billion, including cost of currency conversion, as a number of programs ended.
Magna’s net income from continuing operations was up for the year as a whole, but down in the fourth quarter. Full-year profit from continuing operations was $1.94 billion, up one per cent from $1.922 billion.
For the fourth quarter ended Dec. 31, net income from continuing operations dropped by 6.4 per cent to $483 million from $516 million. Earnings per share from continuing operations dropped to $1.19 from $1.23.
During the year, Magna sold almost all of its interiors operations—classified as discontinued operations—and announced or completed major acquisitions that the company believes will help it reposition for future demand.
“Overall, we are satisfied with the progress we made during 2015,” said chief executive Don Walker in a statement from Aurora, Ont., where Magna has its global headquarters.
In its outlook for 2016, Magna is estimating between $34.6 billion and $36.3 billion of sales this year. That would include between $1.7 billion and $2 billion from assembling complete vehicles for Magna customers.
Despite the currency-induced revenue drop, Magna increased its quarterly dividend by 25 cents per share. A 14 per cent hike, the company has now raised its dividend for six straight years.
