Nemak’s revenue leaps in Q2, net income swings back into the black

Mexican supplier Nemak’s revenue climbed 137 percent to $955 million in the second quarter as improved operating efficiencies, higher aluminum prices and favorable currency exchange rates helped boost results — offsetting production interruptions caused by the global microchip shortage.

The supplier of powertrain and body structure components on Tuesday said it swung to net income of $44 million in the second quarter from a $125 million loss a year earlier, when customer production stoppages hindered its global operations for eight consecutive weeks.

Nemak’s production volume grew to 9 million units in the second quarter, up nearly 104 percent from 4.4 million units in the year-earlier period. The supplier says that’s because of increased customer demand and improving economic conditions in the post-pandemic world.

Earnings before interest, taxes and other adjustments swung from a loss of $37 million in the year-earlier period to $150 million this quarter.

“This quarter was marked by a continued recovery trend, as we harnessed new product launches — including in our e-mobility and structural applications (EV/SC) segment — together with operating efficiencies to capitalize on a more favorable industry environment, which more than offset effects of the global semiconductor shortage,” CEO Armando Tamez said in a statement.

In North America, revenue surged nearly 154 percent to $462 million, while EBITDA in the region rose to $74 million. European revenue rose 144 percent to $381 million, while EBITDA rose to $68 million.

Nemak said it won new contracts worth $240 million annually, which includes about $25 million of replacements for e-mobility and structural applications.

Nemak, of Garcia, Mexico, ranks No. 61 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $3.15 billion in 2020.

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