Tuesday, July 23, 2024


The same old story of rising revenues confounded by crumbling profitability afflicted leading US off-road vehicle and motorcycle manufacturer Polaris Industries in half-yearly 2022 results. BDN financial editor Roger Willis reports.

During the six months to 30 June, overall turnover climbed by 4.8% to £3.316bn. Operating profit suffered a 25.5% decline to £253m. A double-take on the bottom line was then necessary, to cope with impairments from discontinued operations (because Polaris had sold off part of its business in the second quarter). In the first instance, net profit from continuing operations fell by 25% to £187m. But once impairments had been factored in, the bottom line was rewritten as plummeting by 77.6% to just £57m.

This appeared to be even more dramatic in Q2 numbers. Revenue actually rose by 7.9% to £1.78bn, operating profit was only 8.4% down at £167m and net profit from continuing operations fell by 8.5% to £123m. However, accounting for the impairment’s full force meant the company actually incurred a Q2 net loss of £4m, versus a Q2 2021 net profit of 137m.

Brushing such distractions aside, Polaris is still assailed by the standard list of post-pandemic disruption issues, according to its chief executive Mike Speetzen. But he notes “some easing of logistics complexities, commodity costs and supply-chain bottlenecks” going forward into the second half of 2022.

During Q2, key revenue from Polaris off-road vehicle (ORV) wholesale shipments to dealers improved by 6.6% to £1.288bn. Its on-road segment, primarily encapsulating the Indian motorcycle brand and Slingshot trikes, had flatlined — a mere 0.4% up to £259m.

However, Speetzen admitted that North American ORV retail sales in Q2 were about 25% down and Indian motorcycle retail in the US and Canada had plunged by more than 40%, in both cases due to dealer inventory shortfalls.

$-£ currency translation at forex rates applicable on 1 September.


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