By Pietro Lombardi 
 

Stellantis NV expects to post strong margins for the first half of the year but warned that production volumes below planned levels will hit its cash flows.

The auto maker, created through the merger of Fiat Chrysler Automobiles NV and Peugeot SA, said that adjusted operating income margins in the first half of the year should be above the full-year margin guidance range of 5.5% to 7.5%. This result comes thanks to positive pricing and product mix and despite lower-than-expected volumes, it said Thursday.

The company forecasts negative industrial free cash flows "due to the negative working capital impact of the lower than planned production volumes."

However, the full-year cash flow should be positive, in part thanks to a strong contribution from synergies, which are on track to beat the target for the first year, the company said.

The update comes ahead of a presentation of the company's electrification strategy, which will include "significant investments in electrification technology and connected software," it said.

 

Write to Pietro Lombardi at pietro.lombardi@wsj.com; @pietrolombard10

 

(END) Dow Jones Newswires

July 08, 2021 02:36 ET (06:36 GMT)

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