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STRONG Q3 RECOVERY FOR POLARIS

Although its nine-monthly figures were still fairly grim, US powersports manufacturer Polaris bounced back tremendously in the third quarter of 2020, with booming off-road vehicle (ORV) and motorcycle sales leading the way. BDN financial editor Roger Willis reports.

Across nine months to the end of September, total Polaris revenue has fallen by 3.5% to £3.735bn. This resulted in an operating loss of £38.7m, against an operating profit of £266.4m in the same period of 2019. Likewise, the company incurred a net loss of £56.7m, versus a net profit of £172.4m last year.

Turnover from the dominant ORV sector comprising quadbikes, side-by-side ATVs and snowmobiles declined marginally by 0.1% to £2.35bn. Motorcycle revenue from Indian bikes and Slingshot trikes was 6.4% down at £333.2m.

Q3 covering July through to September proved to be an entirely different story. Overall revenue was 10.3% up to £1.498bn. Operating profit soared by 83.7% to £183.5m and net profit achieved an 88.7% increase at £127.9m.

The ORV revenue contribution rose by 11.8% to £988.1m. Motorcycles were 11.3% up to £128m. During the quarter, US domestic retail sales for both the Indian and Slingshot brands were more than 40% higher. And profitability of Indian overseas sales was boosted by a much larger quantity of bikes being produced at the Polaris plant in Poland, thereby avoiding EU retaliatory tariffs.

Commenting on this turnaround, Polaris chairman and chief executive Scott Wine opined that numbers could have been even better, but “were somewhat limited by supply-chain capacity constraints”.

He added: “Demand has remained strong to start the fourth quarter and we expect our sales and earnings momentum to continue for the rest of the year. This pushes our expectations for overall company performance to exceed pre-Covid targets for 2020.”

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