By Giulio Piovaccari
MILAN (Reuters) - Luxury sports car maker Ferrari cut its 2020 core profit forecast on Monday due to disruption caused by the coronavirus pandemic, which it said would mainly hit second quarter results.
The company, known for its red Formula One racing cars and its prancing horse logo, said it now expected adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to edge down from 2019 levels to 1.05-1.20 billion euros.
In February, Ferrari had projected an increase in 2020 EBITDA to 1.38-1.43 billion euros.
The Italian company, which on Monday restarted operations at its plants in Maranello and Modena, forecast a "harsh" reduction of revenues linked to Formula One, where races have been suspended, as well as reduced turnover from brand projects and lower engine shipments to Maserati.
At 1315 GMT, its shares were down 2.7% at 139.55 euros, having fallen more than 5% immediately after the news.
Morgan Stanley analysts said the guidance reduction was steeper than they had expected, but were encouraged Ferrari is still aiming to generate free cash flow this year.
"This extraordinary level of stability in an economic crisis takes top place at the podium and we expect investors to use any weakness as a buying opportunity," they said.
Ferrari, whose origins date back to 1929, now expects industrial free cash flow of 100-200 million euros this year, compared with 400 million euros or more previously.
The company said its new guidance did not include a potential second wave of COVID-19 infections.
In the first quarter of this year, adjusted EBITDA rose 1.9% to 317 million euros ($347 million), broadly in line with a 322 million euro forecast in an analyst poll compiled by Reuters.
Ferrari's two plants, both located in Italy's northern Emilia Romagna region, had been closed since mid March.
Volumes rose despite delivery suspensions due to the virus outbreak, driven by 488 Pista and 488 Pista Spider models, along with the ramp up of the F8 Tributo, the company said.
The margin on adjusted EBITDA came in at 34% in the first quarter, up from 33.1% a year earlier.
Ferrari said its total available liquidity at the end of March was 1.23 billion euros. Last month, it secured additional committed credit lines worth 350 million euros, with maturities up to 24 months, taking total committed, available and undrawn credit lines to 700 million euros, it said.
($1 = 0.9148 euros)
(Reporting by Giulio Piovaccari; Editing by Valentina Za and Mark Potter)
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