Jaguar Land Rover expects free cash flow of around 500 million pounds for the full financial year.
While that is half the forecast of more than 1 billion pounds that the company gave back in 2022, it significantly exceeds a more recent estimate as supply chain snarls that dented business in the second quarter eased.
JLR missed expectations in the second quarter but has beaten its second-half guidance for both volume and cash flow versus what was forecast in November of 2022 as the supply of chips gradually improved, a spokesperson said via email.
The global semiconductor shortage has undermined the luxury carmaker’s turnaround as it struggles to work through a debt reduction plan.
While JLR has ramped up production of its Range Rover and Range Rover Sport models, it's still feeling the effects from a chip dearth that has beset the entire industry over the past two years.
In November, the loss-making manufacturer said it's cutting output of the Range Rover Velar and Jaguar F-Pace models made in the UK to focus on on higher-margin models.
JLR owner Tata Motors said Thursday that JLR's preliminary estimated cash balance was more than 3.7 billion pounds as of March 31 while net debt was around 3 billion pounds.
JLR's retail sales rose 30 percent from a year earlier to 102,889 units in the January to March quarter while wholesales, excluding its joint venture in China, increased 24 percent year-on-year to 94,649 units.
Wholesale volumes in China, JLR's biggest market, rose 17 percent compared with a 13 percent drop in the previous quarter, the company said.
The automaker’s order book at March-end was 200,000 units, down 15,000 units from Dec. 31, reflecting higher retail sales in the last quarter, JLR said, adding that it saw demand for Range Rover, Range Rover Sport and Defender models.
JLR's performance is key to Tata Motors as it contributes nearly 60 percent to the group's revenue from operations.
Reuters contributed to this report
