Polestar reports third quarter results, cutting operating loss by a third year-on-year

Polestar’s (NASDAQ:PSNY) position as one of the world’s two pure electric vehicle makers was cemented with a strong third quarter earnings report, which showed soaring gross revenue and profit and a operating loss reduced by one third. The Swedish automaker reiterated its delivery target of 50,000 vehicles, expecting the fourth quarter to be its best three-month performance in the company’s history.

Polestar’s revenue skyrocketed in the third quarter, from $748 million in 2021 to $1.477 billion this year. Growth was primarily driven by higher Polestar 2 sales and continued commercial expansion in all markets. Revenue per vehicle was down slightly, Polestar said, attributing the slight reduction to product mix and markets.

Polestar currently recognizes its active markets as Australia, Austria, Belgium, Canada, China, Denmark, Finland, Germany, Hong Kong, Iceland, Ireland, South Korea, Kuwait, Israel, Italy, Luxembourg, the Netherlands, New Zealand, Norway and Portugal. , Singapore, Spain, Sweden, Switzerland, United Arab Emirates, United Kingdom and United States.

Gross profit also increased significantly from the same quarter in 2021. Polestar reported gross profit of $57 million in the third quarter of 2022, compared to just $1 million last year. This is due to rising Polestar 2 sales and falling manufacturing costs, which come as companies ramp up production of their vehicles. The growth in gross profit was slightly offset by “the continued deterioration of the Swedish krona against the Chinese renminbi, which led to an increase in the cost of sales,” the automaker said.

Polestar achieved five feats in the third quarter, including the launch of the Polestar 3, which received mixed reviews due to its sleek, competitive design that also features less than admirable efficiency. The event provided a spike for the company’s website, which was only lifted by user visits following the Superbowl announcement the company aired in February.

Polestar will soon hit the milestone of 100,000 Polestar 2 production vehicles. He expects the fourth quarter to be its biggest quarter yet as manufacturing growth continues to help the company solidify itself as a major player in the market.

The company’s revenue of $1.48 billion in the first nine months of 2022 only increases to the $2.4 billion that Polestar expects to generate for the full year. This is an estimated 80% increase from 2021. It also secured an additional $1.6 billion in funding and cash from major shareholders, which in addition to other potential funding, will provide Polestar with sufficient funds to operate until 2023.

Polestar reduced its SG&A expenses by 10% from the third quarter of 2021, from a loss of $199 million to $179 million, and its R&D expenses by 51%, from a loss of $51 million. dollars to a loss of $25 million. It also cut its operating loss by a third from the third quarter of 2021. These numbers tell a different story of the first nine months of 2021 compared to the same period this year.

General and administrative expenses increased by 31% for the first nine months of 2022 compared to the same period in 2021. This was due to “rapid business expansion and a significantly increased global presence”. R&D expenses decreased by 22% due to lower depreciation. Meanwhile, operating loss rose 64%, “reflecting investment in business growth and non-recurring, non-cash listing expenses of $372 million.”

Polestar has started production of the Polestar 3 and expects to begin deliveries early next year. It will also launch the Polestar 4 in early 2023, he said.

Polestar shares are up nearly 20% at press time, trading at $5.44 per share.

Disclosure: Joey Klender is not an investor or shareholder of Polestar.

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Polestar’s Third Quarter Revenue and Gross Profit Soar, Operating Losses Shrink 33%

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