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High borrowing costs allowed Aston Martin to post a larger third-quarter loss than last year, despite the luxury automaker’s sales more than doubling due to demand for its vehicle DBX sport utility.
The company took out £ 1.1bn of high-interest debt last October as part of a refinancing aimed at providing much-needed liquidity during its turnaround plan.
Paying interest on the debt resulted in financing costs reaching £ 133million between August and October of this year, far more than the £ 79million spent by Aston in the same period the year before.
As a result, the pre-tax loss for the quarter was £ 97.9million, compared to a loss of £ 80.5million in the same period last year, despite improving conditions in the underlying activity.
“The cost is higher than we would have liked,” CFO Ken Gregor told the Financial Times. He said the company is expected to be saddled with large interest payments until “probably 2023” when the company hopes to refinance the debt again.
“It is on hold until we are able to refinance,” he said, adding that it will take longer for the company to reach a bottom line, which the new management team had. hoped to achieve this year.
After funding costs were eliminated, Aston’s operating loss was £ 30.2million, up from £ 69.8million in the same quarter for 2020.
It sold 1,349 cars in the quarter, up from 660 a year earlier, pushing revenue up to £ 237.6million from £ 124million, while the average selling price of its models base was £ 148,000, up from £ 130,000 a year earlier.