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BIKES SHINE LIGHT IN POLARIS DARKNESS

According to its financial results for the second quarter of 2016, US powersports manufacturer Polaris Industries is having a tough time, due to ongoing sales declines in core off-road vehicle (ORV) markets exacerbated by an expensive ATV recall biting into profit. Only the company’s motorcycle division is piling on performance.

Overall revenue for this three-month period rose by just 0.6% to £860.4m. Operating profit fell by 28.7% to £89m, afflicted by a one-off £19m recall charge. Net profit was 29.5% down at £54.1m.

ORV revenue — which includes quadbike and side-by-side ATV sales as well as snowmobiles — shrank by 5.7% to £615.2m, but motorcycle revenue from the Indian, Victory and Slingshot brands was 23.3% up at £176m.

All three bike brands grew sales volume during the quarter, together up by a percentage in the “mid-teens” — in contrast with overall US retail figures for 900cc and above products posting a single-digit percentage decline in the same period. Polaris added that dealer inventory had increased adequately to meet demand, thanks to significantly improved paint capacity at its motorcycle plant in Spirit Lake, Iowa. Slingshot trike assembly has now moved to a new factory in Huntsville, Alabama, which also makes Ranger ATVs.

For the six months of this year to date, total Polaris turnover has fallen by 2% to £1.6bn. Operating profit suffered a 38.2% drop to £147.4m. Net profit fell by 37.7% to £89.6m.

Commenting on the results, Polaris chairman and chief executive Scott Wine said: “Our all-out assault on costs continued to make progress during the quarter, generating earnings that finished in-line with updated guidance. As we move into the second half of the year, we are building a platform to return to profitable growth.”

 

 

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