Luxury sports car manufacturer Ferrari NV has reported better-than-expected first-quarter earnings, driven by increased demand for its high-end vehicles and rising prices. The company's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to €537m ($593m), surpassing the average analyst estimate of €509.4m. Ferrari's Q1 revenue totalled €1.43bn.
Despite the COVID-19 pandemic, Ferrari's wealthy clientele has proven to be less affected by inflation and rising interest rates, allowing the company to hike the prices of some of its models. Meanwhile, mass-market carmakers are preparing for a slowdown in demand. Porsche AG recently announced plans to increase prices by up to 8% in the US and Europe.
Ferrari is also preparing to shift its focus towards electric vehicles, with the first fully electric Ferrari expected to launch in 2025. Battery-only and plug-in hybrid models are also slated to dominate the company's portfolio in the second half of the decade. Hybrid cars made up 35% of shipments during the first quarter, according to the company.
This transition to an electrified future is expected to increase Ferrari's average transaction price and augment its mammoth €154,000 EBITDA per vehicle as internal combustion engine-based products become "specials", according to Bloomberg Intelligence analyst Joel Levington.
In addition to its electric vehicle plans, Ferrari also unveiled the Purosangue in September, which looks more like a sport utility vehicle than the company's traditional portfolio of low-slung, two-door sports cars. This move is expected to broaden Ferrari's customer base.
Despite the ongoing pandemic and economic uncertainty, Ferrari's strong earnings demonstrate the continued demand for luxury sports cars and the company's ability to adapt to changing market conditions and consumer preferences.