Sixt reports Q1 loss despite ‘record’ earnings

Car rental company Sixt has posted a Q1 loss of €27.5 million, despite reporting its ‘highest-ever earnings’ for the quarter with €780.2 million in revenue.

The Germany-based company cited “challenging market conditions” – higher vehicle costs and a decline in the residual value of used cars – as the reason behind the loss, which came in at the lower end of its previously forecasted range for the first quarter.

Revenue for the quarter was 12.3 per cent higher than the same period last year and marked the 12th consecutive quarter of double-digit year-on-year growth, according to the company. The North American market generated the highest revenue gains (up 21.6 per cent), followed by Germany (up 11.5 per cent) and the rest of Europe (up 5 per cent) with a combined fleet of 162,000 rental vehicles.

The company said it has been working to counter deteriorating market conditions “since the beginning of the year”, including increased rotation of its existing fleet and reducing the number of electric vehicles following a dip in demand.

Sixt CFO Kai Andrejewski said the company is “still on course for growth in 2024” and expects to return to profit in the next quarter with earnings of between €60 and €90 million, followed by “a significant tailwind” in the second half of the year.

“The entire industry is facing headwinds due to macroeconomic conditions such as continuing inflationary pressure, lack of a reversal in interest rates and declining residual vehicle values, especially in the electric vehicle sector,” Andrejewski said.

“We continue to invest in the quality of our fleet, the expansion of our network and the optimisation of our customer experience. These actions, combined with the resilience of our business, are enabling us to outperform competitors,” he added.