Ferrari boasts record year as prepares to turn 70

Miami : Italian luxury carmaker Ferrari said Thursday it had achieved record profits in 2016, bolstered by strong demand for its supercharged 488 sports cars, a fillip to the "prancing horse" firm as it prepares to turn 70.

The company announced better than expected net profits soared 38 percent to 400 million euros ($430 million), 110 million up on 2015 and outstripping analysts' forecasts of nearer 390 million, amid an 8.8 percent rise in sales to 3.1 billion euros.

Traders received the news well on the Milan bourse as the automaker's share price rose 3.73 percent to 59.75 euros -- an all-time closing high, prompting CEO Sergio Marchionne to salute "a good year" as he targeted production of 10,000 units for 2020-2025.  

"We are satisfied with the progress we have made," said Marchionne, saluting a focus on keeping costs under control to bolster operating margin.

"This achievement was led by the success of both the 488 GTB and the 488 Spider," sports cars, the company said in a statement.

The results were Ferrari's first as a stand-alone company after it split from former parent company Fiat Chrysler and came as it posted shipments topping 8,000 vehicles -- an annual rise of 4.6 percent beyond the 7,700 figure for 2015.

Europe and the Middle East saw sales progress 7.7 percent although the rise was just one percent in China after Ferrari ended a partnership with a Hong Kong distributor in the fourth quarter of 2016.

Adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) rose an annualised 17.6 percent to 880 million euros, ahead of a target of 850 million, while net debt fell to 653 million euros from 797 million.

 70th anniversary 

Ferrari is targeting sales topping 3.3 billion euros in 2017 with debt levels ramped down still further to around 500 million euros, according to the "prudent" hopes of Marchionne, who rejected chasing "unrealistic targets."

He added he wanted the group to remain faithful to its image as a luxury sports car maker, to maintain the purity of the brand.

While seeking to broaden the base of the producer's clientele, Marchionne said he was not targeting a "huge tribe, but a manageable tribe," of customers to ensure that Ferrari could surpass 10,000 annual sales "without disrupting the DNA of the brand."

Ferraris are priced from around 200,000 to 450,000 euros.

The group was founded by Enzo Ferrari in 1947, and hence will this year celebrate its 70th anniversary.

Regarding Formula One racing, Marchionne said Ferrari had begun "exploring the opportunity of acquiring a participation" and had held talks on the subject with new owner Liberty Media. 

US-based Liberty Media recently completed its takeover of motorsport's most prestigious brand in a deal valued at about $8 billion.

But Marchionne urged caution given that a Formula One  revenue-sharing accord between team owners expires in three years time.