The group’s EBIT margin was 11.4 percent, more than double the low end of the range forecast in March.
North America was the company’s standout region in the first half, bolstered by the Jeep SUV and Ram truck brands. Net revenue rose 42 percent to 32.4 billion euros, and the company earned a 16.1 percent margin. In the automaker’s Europe region, the margin was 8.8. percent.
The Maserati luxury brand reported first-half adjusted operating income of 29 million euros after two years in the red.
The automaker does not report earnings on a quarterly basis.
Stellantis raised its industry sales outlook for the U.S. market to 10 percent growth this year, from 8 percent, and reiterated that it expects 10 percent expansion in Europe.
Chips crisis
Stellantis and its biggest carmaking peers have raised prices and sold a richer mix of higher-end vehicles due to the shortage of automotive semiconductors.
The company’s latest guidance increase relies on the assumption of no further deterioration in the global chip shortage and of no further lockdowns in Europe and the U.S. due to the COVID-19 pandemic.
Stellantis was hit by production constraints brought about by the semiconductor shortage in the first half.
The issue cost production of about 700,000 vehicles, and the impact will be similar for the remainder of the year, CFO Richard Palmer said on a call with reporters.
Palmer said the automaker did not see an improvement in the chip supply situation before the final quarter.
He added that a spike in raw material prices also remained a challenge.
Rising prices for raw materials including steel, aluminum, precious metals and copper raised costs by about 700 million euros in the first half and are expected to lead to an even bigger hit in the final six months of the year, Palmer said.
Stellantis ended June with inventory of 882,000 vehicles, down by about a third from what Fiat Chrysler and PSA had in stock a year earlier.
Stellantis said its pro-forma industrial free cash flow was a negative 1.16 billion euros, “reflecting negative working capital impacts due to unfilled semiconductor orders, offsetting positive net synergies.”
Merger-related savings
Stellantis said it had made around 1.3 billion euros in merger-related net cash savings in the first half. Palmer said he was confident the group would reach its long-term goal of 5 billion euros in annual savings and aimed to reach 80 percent of that target by 2024.
CEO Carlos Tavares last month unveiled a plan to plow 30 billion euros into electric cars and software. Stellantis will shift to battery power quicker in Europe, which has proposed phasing out combustion engines by 2035, than in the U.S. and keep plug-in hybrids in the mix.
The company said it expects to meet European rules on carbon pollution this year and saved about 135 million euros in the first half after exiting a costly deal with Tesla to offset CO2 emissions in the region.
Stellantis said on Tuesday it would launch 11 new battery-electric vehicles and 10 plug-in hybrid vehicles in the next 24 months.
Reuters and Bloomberg contributed to this report