Ford braced for $600 million Brexit currency hit - Reuters
|Ford's (F.N) was on the wires via Reuters, as their 2017 earnings will be hit by a delayed currency impact of at least $600 million from Britain's vote to leave the European Union, the U.S. carmaker told Reuters, putting last year's record European profit levels beyond reach.
Key Highlights
-The company will no longer benefit from currency hedges that had been shielding it from the pound's slump since the June 23 referendum, Ford of Europe boss Jim Farley said on Friday.
-When Brexit happened we were fully hedged for the first quarter with the stronger pre-Brexit exchange rate," Farley said. "As we enter the rest of the year, especially the second half, we now face the full effects of the weaker sterling.
-Ford is Britain's biggest engine maker as well as its top-ranked car brand by sales, with a 12 percent market share. The UK government has said it will trigger the two-year process for exiting the EU by the end of March.
-Ford, which employs 14,000 workers in Britain and 25,000 in Germany, also repeated warnings against the introduction of trade tariffs with a final Brexit settlement. The company builds engines at two UK sites for vehicles assembled in mainland Europe, many of which are then sold back in Britain. A weaker pound hurts the exchange value of UK revenues and squeezes the profitability of vehicles with euro-denominated parts and production costs.
Why the UK Court ruling on Article 50 is terrible news for both the UK and Europe
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.