Canadian supplier Magna International said Friday that fourth-quarter net income and revenue fell as lower vehicle production caused by the microchip shortage hampered results. Still, the company raised its quarterly cash dividend by 5 percent to 45 cents a share as it generated solid free cash flow for 2021.
North America's largest auto supplier also said Board Chair William L. Young, 66, will retire at the end of the current term. The board has selected Robert F. MacLellan, 66, currently audit committee chair, to succeed Young following Magna’s annual meeting on May 3.
For the quarter Magna's net income fell 37 percent to $464 million, while adjusted earnings before interest and taxes fell 54 percent to $508 million. Revenue dropped 14 percent to $9.1 billion as global vehicle production was down 17 percent.
For the full year net income doubled to $1.5 billion on revenue of $36.2 billion, an increase of 11 percent. Full-year adjusted EBIT rose 23 percent to $2.1 billion.
“Although 2021 presented its share of challenges, we delivered above-market sales growth and generated solid free cash flow, as we worked closely with our customers and suppliers to minimize the impacts on vehicle production," CEO Swamy Kotagiri said in a statement.
In 2021, Magna generated cash from operations of $2.9 billion
The company, which lost a bid to bolster its advanced driver assistance systems business through an acquisition of Sweden's Veoneer, is now looking to capitalize on soaring demand in the areas of electrification and autonomous cars.
"We expect improved operating results in 2022 as the industry recovers and production schedules normalize," Kotagiri said in the statement.
The Ontario-based company estimates 2022 net income of $1.7 billion $1.9 billion and revenue of $38.8 billion to $40.4 billion.
In addition to MacLellan succeeding Young as board chair, the company announced other changes to the board:
- Peter G. Bowie, 74, will succeed MacLellan as audit committee chair.
- Thomas Weber, 67, formerly a member of Magna’s Technology Advisory Council and a highly-respected former Daimler executive, has been appointed to the board as a non-independent, non-executive director.
- Cindy Niekamp 61, has also communicated her intention to retire at the end of her current term in May.
Reuters contributed to this report.