Sixt continues to suffer from depreciating residual values - forecast lowered again
Hospitality and travel with prospects
Sixt SE has again lowered its forecast for the current year due to rising interest rates and inflation, as well as the depreciation of residual values of used rental cars. Sixt also sees a risk in the Ukraine war.
In 2022, the SDAX-listed company now expects adjusted earnings before interest and taxes (EBIT) of between EUR 890 million and EUR 940 million, as announced by the company on Wednesday in Pullach near Munich. In May, Sixt had forecast an EBIT of between 970 million and 1.03 billion euros. In the previous year, adjusted EBIT was EUR 840.8 million.
The operating result (EBIT) is expected to fall by 20 to 25 percent to between 420 million and 470 million euros, according to the current forecast. This would be significantly below the previous year's result of EUR 560.1 million.
Rising personnel and energy costs
Sixt justified the forecast reduction with rising personnel and energy costs, as well as the higher interest rate level and the resulting depreciation of used vehicles, which are sold after being rented out.
- The travel and mobility group saw its revenue increase by 26 percent to 2.8 billion euros in the first half of the year.
- Adjusted EBIT grew by 22 percent to EUR 398.2 million.
- However, net income fell by 10.5 percent to EUR 167.2 million, mainly due to higher depreciation and interest expenses.
Sixt is also feeling the effects of the war in Ukraine. The company has suspended its business in Russia and is currently not renting any vehicles there. In addition, the war is having a negative impact on demand for mobility services in Europe.
Despite the challenges, Sixt continues to see opportunities in the hospitality and travel sectors. The company is investing in expanding its car rental and ride-hailing services, and is also expanding its hotel portfolio.
