Jaguar Land Rover profits halved due to tariffs, gold futures reach record high amid US trade blow to Switzerland

Jaguar Land Rover profits halved due to tariff-hit sales. US tariffs on luxury vehicles and refining industry led to a 49.4% drop in pre-tax profit to £351m. Gold futures price soared to a record high after the US announced tariffs on imports of 1kg bars. River Island secured a rescue restructure, saving 4,000 jobs but closing 33 stores.

Jaguar Land Rover (JLR), the UK's largest automotive employer, has reported a significant drop in profits due to the impact of US tariffs on luxury vehicles. The company's pre-tax profit fell by 49.4% to £351 million in the three months to the end of June, compared to £693 million in the same period a year ago [1].

The decline in profits can be attributed to a 9.2% drop in quarterly revenue to £6.6 billion, primarily due to a temporary pause in exports to the US and the phase-out of older Jaguar models before the launch of new electric ranges next year [1]. US tariffs had a "direct and material impact on profitability and cash flow" during the period [1].

The company also reported a cash outflow of £750 million compared to cash inflows of £1.3 billion in the previous quarter [1]. However, JLR stated that the recently signed UK-US trade deal would significantly reduce the financial impact of US tariffs in subsequent quarters [1].

Adrian Mardell, the outgoing CEO, attributed the challenging global economic conditions and the impact of US tariffs to the drop in profits [1]. The company announced that the new UK-US trade deal, which came into effect on 30 June, would cut tariffs on UK-built cars exported to the US from 27.5% to 10% [1].

JLR's retail sales fell to 94,000 from 111,000 a year ago, with sales of Jaguar cars dropping to just 5,300, a year-on-year fall of 66% [1]. The company plans to cut up to 500 management jobs as part of a voluntary redundancy programme [1].

The company's earnings before interest and tax (EBIT) remained at 4%, slightly lower than the guidance range of 5 to 7% [3]. JLR remains focused on its transformational Reimagine Strategy, including investing £3.8 billion this financial year to support the development of next-generation electric vehicles [3].

References:
[1] https://www.thetimes.com/business-money/companies/article/profits-halved-at-tariff-hit-jaguar-land-rover-l6chtb7g0
[2] https://www.livemint.com/companies/company-results/indian-automaker-tata-motors-quarterly-profit-plunges-as-tariffs-slow-sales-bite-11754658401126.html
[3] https://uk.news.yahoo.com/jlr-report-profitable-quarter-despite-133847207.html