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April 30, 2022

Canadian electric bus maker NFI slashes profit outlook because of ‘critical’ supply shortage

Electric bus maker NFI Group Inc. slashed its profit outlook Friday, warning that a shortage of “critical” microprocessors would cut its deliveries for the rest of the year.

The Winnipeg-based company cut its guidance for adjusted earnings before interest, taxes, depreciation and amortization for 2022 to between US$15 million and US$45 million because of “supply chain challenges.”

According to FactSet, the previous outlook for adjusted Ebitda was between US$100 million and US$130 million, reports Dow Jones Newswires.

The company said it was recently notified by its primary North American control module supplier that it would be unable to provide consistent supply for the rest of the year because of microprocessor shortages. The bus maker is working to find alternative suppliers but expects it will have to lower production at some of its plants.

“The control module is a critical component for vehicle operations, and this shortage will impair NFI’s production of North American transit buses,” NFI said in a statement Friday.

The disruption means the company will have to hold almost completed vehicles in inventory until the microprocessor control modules arrive and can be installed.

NFI stock was trading down almost 17 per cent in Toronto Friday.

Canadian auto parts maker Magna International Inc also cut its profit forecast Friday because of the global semiconductor shortage and the rising cost of raw materials.

The chip shortage has forced many of Magna’s clients, such as Toyota, General Motors, Ford Motor and Stellantis, to either cut production or temporarily shutter plants, Reuters reports.

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