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POLARIS PROSPERS AGAINST HEADWINDS

Despite serious supply-chain constraints limiting production and inventory available to dealers, the off-road vehicle (ORV) and motorcycle businesses of US powersports giant Polaris Industries rebounded mightily in the first half of this year. BDN financial editor Roger Willis reports.

In the six months to 30 June, total Polaris revenue climbed by 39.5% to £2.932bn. Operating profit recovered to £287.5m, versus an operating loss of £208.8m in the same period last year. Net profit reached £210.9m, bouncing back from a loss of £173.5m.

The company’s core ORV operations, which makes quadbikes, side-by-side ATVs and snowmobiles, increased turnover by 43.3% to £1.834bn, accounting for 62.6% of all Polaris sales. Its motorcycle sector, producing Indian cruisers and Slingshot trikes, put on 40.8% to £271.7m.

Figures, particularly during the second quarter, were complicated by contrasting year-on-year impacts. In Q2 2020 when the Covid pandemic first struck, North American retail sales had remained strong thanks to plenty of early-season stock. But wholesale shipment revenue took a hammering due to production shutdowns, hence the losses. Then in Q2 2021, retail sales fell by 28% because dealers simply couldn’t fulfill an abundance of orders because of supply-chain glitches.

Polaris chief executive Mike Speetzen underlined in his results presentation that input costs from those glitches, plus rising wages, logistics and commodity prices, have also become issues, and warns that such “headwinds” will continue into the second half of the year.

$-£ currency translation at forex rates applicable on 27 July 

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