TI Fluid Systems shares surge as dividend doubled

Shares in automotive sector player TI Fluid Systems surged on Tuesday as the company more than doubled its dividend and posted a surge in earnings.

Adjusted EBIT came in at €131.9m for the period, up from €83.7m year-on-year, while statutory operating profit jumped to €95m from €48.3m. TI Fluid more than doubled its dividend to 2.30 euro cents a share from 1 cent a share.

The firm said new business bookings and battery electric vehicle (BEV) awards had surged to €1.36bn and €649m respectively on a lifetime basis, with China accounting for nearly 45% of BEV awards.

A share buyback programme worth up to €40m was meanwhile set to start in the second half, pending regulatory and shareholder approval.

Looking ahead, TI said that while it was wary of an unpredictable global climate and anticipated only modest global economic growth, it was optimistic. It estimated global light vehicle production (GLVP) of around 85 million units for the year, making for a 3.3% increase from the prior year.

That figure was slightly lower than the latest predictions from S&P Global, and as a result, its second half performance could be somewhat lesser than the first six months of the year.

Still, for the entire year, the company said it anticipated revenue outstripping projections.

Additionally, TI projected that full-year adjusted EBIT margins would exceed 7%, thanks to operational improvements, cost recoveries, and volume boosts.

Adjusted free cash flow conversion was anticipated to be around 30% of adjusted EBITDA.

“We continued to make good strategic progress, in line with our plans, pivoting towards electrification whilst continuing to drive strong performance in our ICE business,” said president and chief executive officer Hans Dieltjens.

“Two new eMIC facilities were opened in South Korea and Japan in line with our strategy to bring local support directly to our customer base, increasing the speed of development and improving efficiency and collaboration.

“This progress was reflected in the continued growth of new business awards on BEV platforms.”

Reporting by Josh White for Sharecast.com.