# Iveco supply issues to peak this quarter after weighing down Q1 Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-26 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Iveco Group Sees Record Orders but Supply Chain Disruptions Meta Description: Iveco reports record orders but faces challenges due to global supply chain disruptions affecting production and profit margins in the first quarter. URL: https://financedigest.com/iveco-supply-issues-to-peak-this-quarter-after-weighing-down-q1html ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-04-26t122435z1lynxnpei3p0ixrtroptp4iveco-debut-1736815818721-compressed.jpg) MILAN (Reuters) -Italy’s Iveco Group said on Tuesday supply chain disruptions would peak in the second quarter, after they prevented the truckmaker from benefitting from record orders in the first three months of the year. As the company posted higher-than expected operating profits in the first [quarter](https://www.financedigest.com/daimler-truck-q1-sales-drop-13-as-markets-normalize.html) thanks to its performance in light commercial vehicles and buses, Chief Executive Gerrit Marx told analysts that order books were at a record high in the period. “Unfortunately we could not turn (the record orders) into higher revenues and vehicle registrations as scheduled due to the well-known component shortages,” Marx said. The group, which completed a spinoff from former parent CNH Industrial at the beginning of January, said global [supply chain](https://www.financedigest.com/5-steps-to-successful-supply-chain-finance.html "5 Steps to successful supply chain finance") issues were the main challenge for its operations this year, including raw material price increases and parts availability, semiconductors in particular. Marx said that as the company progressed through the second quarter, “we foresee the most [severe impacts](https://www.financedigest.com/the-severe-impact-of-downtime-on-companies-bottom-lines.html "The severe impact of downtime on companies’ bottom lines") from component shortages for the entire year. He said [higher production costs should be offset by the company’s pricing](https://www.financedigest.com/vhs-tapes-selling-for-46000-higher-than-original-price.html "VHS tapes selling for 46,000% higher than original price") power in the second half of this year. RESULTS [TOP FORECASTS](https://www.financedigest.com/uks-top-manufacturing-body-slashes-forecasts-for-2023.html "UK’s top manufacturing body slashes forecasts for 2023") In its first set of results as a standalone company, the truckmaker said its adjusted earnings before interest and tax (EBIT) of industrial activities fell to 82 [million euros](https://www.financedigest.com/amazon-grants-1-5-million-euros-to-dutch-seaweed-farm-project.html "Amazon grants 1.5 million euros to Dutch seaweed farm project") ($88 million) in January-March. Increased production costs weighed on the quarter’s adjusted EBIT by 119 [million euros](https://www.financedigest.com/iag-agrees-to-buy-80-stake-in-air-europa-for-400-million-euros.html "IAG agrees to buy 80% stake in Air Europa for 400 million euros"). The result still exceeded an analyst consensus of 37 million [euros reported](https://www.financedigest.com/european-governments-spend-half-a-trillion-euros-on-energy-crisis-report-2.html "European governments spend half a trillion euros on energy crisis – report") by Intesa Sanpaolo. [“Results were far less bad than we expected,”](https://www.financedigest.com/demand-for-fast-transit-of-logged-woods-from-forests-to-stock-areas-is-expected-to-result-in-higher-demand-for-forwarders.html "Demand for Fast Transit of Logged Woods From Forests to Stock Areas Is Expected To Result In Higher Demand For Forwarders") a Milan-based trader said. [Shares turned positive](https://www.financedigest.com/oil-stocks-thrust-london-shares-to-positive-2023-start.html "Oil stocks thrust London shares to positive 2023 start") after its earnings were published and were up 3.2% by 1455 GMT. Since starting to [trade on the Milan market](https://www.financedigest.com/online-trading-and-stock-markets.html "Online Trading and Stock Markets") on Jan. 3 at a [price of 11.26 euros](https://www.financedigest.com/carrefour-unveils-30-euro-shopping-basket-in-spain-after-government-price-cut-proposal.html "Carrefour unveils 30 euro shopping basket in Spain after government price cut proposal"), Iveco shares have lost around half of their value. [Iveco said its operations](https://www.financedigest.com/iveco-to-transfer-nordic-retail-and-commercial-operations-to-hedin.html "Iveco to transfer Nordic retail and commercial operations to Hedin") in Russia and Ukraine, which were suspended during the first quarter, did not constitute a material portion of its business. However, the company booked a negative after-tax impact of 51 million euros linked to its operations in the two countries, mainly due to the impairment of certain assets, which led it to post a 15 million [euro net loss in the first quarter](https://www.financedigest.com/euro-having-a-laugh-a-quarter-of-brits-take-the-wrong-currency-on-holiday.html "Euro having a laugh: a quarter of Brits take the wrong currency on holiday"). ($1 = 0.9369 [euros)](https://www.financedigest.com/italian-hearing-aid-maker-amplifon-expects-higher-2023-earnings.html) (Reporting by Giulio Piovaccari, additional reporting by Claudia Cristoferi; editing by David Evans and Bernadette Baum) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---