Car production curbs hit TomTom amid chip shortage
(Reuters) – Dutch navigation and digital mapping company TomTom warned on Thursday supply chain problems in the auto sector could last until the first half of next year after it reported a bigger than expected quarterly core loss.
Auto production has been hammered by a global shortage in semiconductor chips, which has forced carmakers still recovering from last year’s coronavirus disruptions to halt production again.
“Collectively we have underestimated how big the supply chain issues, and especially for semiconductor shortages, have been or have become”, Chief Financial Officer Taco Titulaer told Reuters.
Titulaer added TomTom’s consumer and automotive revenue numbers would continue to be affected by these challenges.
The group said the recovery of its automotive division, which supplies maps and navigation software to carmakers, lagged expectations as it saw sales fall 21% in the third quarter.
The consumer business, which sells automotive hardware such as portable navigation devices, beat a company-provided consensus but still saw a decline of 24% in the quarter.
The group’s enterprise business, which provides maps, traffic information and navigation software to tech firms like Uber and Microsoft, saw sales grow 8% because of contract expansions from previous periods.
TomTom reiterated its 2021 revenue guidance, but said it would likely come in at the lower end of its 500-530 million euro range. It also lowered its annual free cash flow guidance from around 5% to around 2% of total revenue.
The Amsterdam-based company reported a third-quarter loss before interest, taxes, depreciation and amortisation of 5.3 million euros ($6.1 million), missing the 1-million-euro loss analysts had forecast.
($1 = 0.8630 euros)
Reporting by Anait Miridzhanian; Editing by Jacqueline Wong and Mark Potter