Dowlais Group PLC, a specialist engineering group focused on the automotive sector, has released its half-year results for 2024. The company reported adjusted revenue of £2,571 million, a 5.1% reduction from the prior year, with the ePowertrain product line significantly impacted by battery electric vehicle (BEV) market volatility. However, Driveline, China, and Powder Metallurgy outperformed their markets, with more than 75% of the group's revenues coming from these segments.
The company's adjusted operating profit was £151 million, including £7 million of operating losses from Hydrogen operations, representing a 9.0% decline compared to the prior year. The adjusted operating margin was 5.9%, 30 basis points lower than the prior period. The automotive segment saw a 6.3% decrease in adjusted revenue and a 13% decline in adjusted operating profit, primarily due to lower revenues in the ePowertrain product line.
Powder Metallurgy had a positive start to the year, with adjusted revenue growing by 0.2% and adjusted operating profit increasing by 6.0%, resulting in an adjusted operating margin expansion of 50 basis points to 9.5%. The company reported adjusted basic earnings per share of 4.9 pence, down 30% from the prior year, and a statutory loss per share of 7.3 pence.
Dowlais Group PLC declared an interim dividend of 1.4 pence per share, in line with the group's dividend policy, reflecting confidence in the medium-term outlook. The company also reported strong business wins in the automotive segment and a 10% increase in the Powder Metallurgy order book, with 53% of new business wins being for electric vehicle (EV) or propulsion agnostic products.
Looking ahead, the industry forecasts a 3.6% decline in the second half of the year, leading to a 2% decline in light vehicle production in 2024. Dowlais Group PLC expects a mid to high single-digit adjusted revenue decline for 2024 and an adjusted operating margin between 6.0% and 7.0% at constant currency.
Liam Butterworth, Chief Executive Officer, highlighted the company's focus on cost control, commercial recovery initiatives, and performance initiatives to mitigate the impact from lower volumes. He also announced a strategic review of Powder Metallurgy and the disposal of Hydrogen operations to unlock value from the company's portfolio and deliver shareholder returns.