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Car production curbs hit TomTom amid chip shortage

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Oct 14 (Reuters) – Dutch navigation and digital mapping firm TomTom (TOM2.AS) warned on Thursday provide chain issues within the auto sector might final till the primary half of subsequent 12 months after it reported an even bigger than anticipated quarterly core loss.

Auto production has been hammered by a worldwide shortage in semiconductor chips, which has pressured carmakers nonetheless recovering from final 12 months’s coronavirus disruptions to halt production once more.

“Collectively we have underestimated how big the supply chain issues, and especially for semiconductor shortages, have been or have become”, Chief Financial Officer Taco Titulaer instructed Reuters.

Titulaer added TomTom’s shopper and automotive income numbers would proceed to be affected by these challenges.

The group mentioned the restoration of its automotive division, which provides maps and navigation software program to carmakers, lagged expectations because it noticed gross sales fall 21% within the third quarter.

The shopper enterprise, which sells automotive {hardware} akin to moveable navigation gadgets, beat a company-provided consensus however nonetheless noticed a decline of 24% within the quarter.

The group’s enterprise enterprise, which supplies maps, visitors info and navigation software program to tech companies like Uber (UBER.N) and Microsoft (MSFT.O), noticed gross sales develop 8% due to contract expansions from earlier durations.

TomTom reiterated its 2021 income steering, however mentioned it will possible are available in on the decrease finish of its 500-530 million euro vary. It additionally lowered its annual free money stream steering from round 5% to round 2% of whole income.

The Amsterdam-based firm reported a third-quarter loss earlier than curiosity, taxes, depreciation and amortisation of 5.3 million euros ($6.1 million), lacking the 1-million-euro loss analysts had forecast.

($1 = 0.8630 euros)

Reporting by Anait Miridzhanian
Editing by Jacqueline Wong and Mark Potter

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