ARB Corporation Limited is in the red in its latest first-half earnings report, posting a 5.1 per cent sales revenue decline to $340.9 million compared with the prior period as vehicle availability continues to constrain sales in Australia and the United Kingdom.
On a positive note, the second quarter of 1H FY2023 was slightly ahead of the previous corresponding quarter, an improvement on the 10 per cent decline in the first quarter reported at the company’s 2022 annual general meeting.
Australian aftermarket sales increased by 2.7 per cent while all Australian states saw an increase in sales except for NSW, which remained steady from the previous similar time.
ARB’s aftermarket sales growth rate was below the growth in new vehicle supply of the company’s key target vehicles (large SUVs, 4WDs and 4WD utilities), reflecting resource-fitting challenges and motor vehicle availability constraints.
The latest market report also saw a 31.2 per cent plunge in net profit after tax (NPAT) totalling $47.4 million for 1H FY2023.
At the same time, profit before tax of $64.6 million declined 29.7 per cent compared with the previous corresponding period.
The profit result takes into account the impact of rising expenses on both the price of the sold goods and the company’s operational cost base, as well as a decline in gross profits due to lower sales revenue.
Export sales fell 8.8 per cent, owing primarily to difficult market dynamics in the key North American market.
The interruption of sales in Russia, and the reduction in new vehicle supply into the United Kingdom were also factors to consider.
To combat the low figures in the US market, ARB is launching a direct-to-customer eCommerce site as one of its longer-term strategies to promote increased sales in the region starting in the second half of FY2023.
Based on a robust client order book and other factors, the company maintains an optimistic short-term view since brand-new and cutting-edge goods are expected to hit the market in 2023.
A favourable picture for the aftermarket category is provided by increasing new vehicle sales, enduringly solid client orders, and improvements in employment possibilities.
