Mexican supplier Nemak swung to net income of $90 million in the third quarter from a $2 million loss a year ago as cost reductions took hold and automakers reopened plants after temporary closures due to the coronavirus pandemic.
Revenue declined 7 percent to $896 million from the year-ago quarter while earnings before interest, taxes and other adjustments rose 28 percent to $178 million.
“During the third quarter, we continued to implement measures to safeguard the well-being of our people and meet our customers’ supply needs amidst the pandemic, while driving additional efficiencies to strengthen the long-term sustainability of our business,” CEO Armando Tamez said in a statement.
In a call with analysts and media, Tamez credited Nemak’s growth to leaner operations, restructuring efforts and a focus on deleveraging.
In North America, revenue fell 11.5 percent to $491 million, while EBITDA in the region was up 15.4 percent to $105 million. European revenue dropped by nearly 7 percent to $301 million, while EBITDA rose nearly 62 percent to $63 million.
The supplier of powertrain and body structure components said it won new contracts in the third quarter of $230 million in annual revenue to produce e-mobility, structural applications and powertrain applications.
The company reduced its net debt by $110 million due to positive cash flow and financial management.
Nemak, of Garcia, Mexico, ranks No. 58 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $4.02 billion in 2019.