Carsales.com Ltd (ASX: CAR) shares are slipping in morning trade following the release of the company's results for the first half of the 2021 financial year (H1 FY21). At the time of writing, the Carsales share price has fallen 4.47% to $21.16.
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What did Carsales report?
The Carsales share price is heading lower today despite the company delivering strong earnings growth in both its domestic and international markets for the half-year ending 31 December. That growth came despite headwinds resulting from the COVID-19 pandemic.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 18% to $126 million. Adjusted net profit after tax (NPAT) of $74 million represented an increase of 17% from H1 FY20. Adjusted revenue was down 2% to $210 million.
(Adjusted figures are post-non-controlling interests and exclude certain non-recurring or non-cash items.)
The company reported earnings growth across all its segments, with the strongest EBITDA growth in its South Korean market, up 30% year on year.
Investors are driving down the Carsales share price after the company reported revenue of $199 million was down 7%. Meanwhile reported EBITDA was up 9% on the prior corresponding period and reported NPAT was $61 million, a decrease of 14%.
Carsales noted that its reported metrics were impacted by an $11 million COVID-19 dealer support package.
The company will pay an interim dividend of 25 cents per share (cps), up 14% on the 22 cents paid in the first half of the 2020 financial year.
Commenting on the results, Cameron McIntyre, Carsales CEO said:
Our ongoing investment in product and customer experience helped us continue strengthening our leadership positions in our largest markets of Australia, South Korea and Brazil. We saw traffic growth of 20% across our global network of automotive websites, demonstrating that we are the best place for our customers to buy and sell cars…
There are positive trends for our business emerging from the pandemic. We have seen accelerated migration to digital platforms across our global network of sites as evidenced by strong traffic growth. Demand for vehicles across all our markets has been strong due to lower public transport usage, the absence of international travel and the evolution of more flexible working arrangements.
Looking ahead, Carsales forecasts modest adjusted revenue growth and "solid" adjusted EBITDA and adjusted NPAT growth for the 2021 financial year, with the assumption there are no major changes to its current operating environment.
Carsales share price snapshot
Over the past 12 months, the Carsales share price is up 14%. That compares to a 3% loss on the S&P/ASX 200 Index (ASX: XJO).
Carsales shares have also surged from their post viral selloff last year, up more than 100% from the 23 March lows. Year to date, the Carsales share price is up 6.2%.
