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Bus maker NFI Group warns Q3 affected by ‘unreliable’ supplier performance, inflation

The Canadian Press   

Machinery and Equipment Maintenance Manufacturing

WINNIPEG (CP) – Shares in NFI Group Inc. were down 15 per cent after warning its third-quarter results will be affected by “unreliable” supplier performance for certain critical parts and components, as well as ongoing inflationary pressures.

The bus manufacturer says it expects an adjusted loss before interest, taxes, depreciation, and amortization of between US$15 million and US$17 million for the quarter.

NFI chief executive Paul Soubry says the third quarter was a “very challenging period” as certain critical suppliers missed committed delivery schedules, creating hurdles in completing bus builds and vehicle delivery targets, with many of these misses escalating in late September and October.

Soubry says the company also experienced short-term margin pressure from higher inflation and surcharge-driven input costs.

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NFI believes the disruptions will continue in the near term and is lowering its planned fourth-quarter vehicle deliveries and updating its guidance for fiscal 2022 to an adjusted loss before interest, taxes, depreciation, and amortization of between US$40 million and US$60 million.

NFI says it has a plan in place to mitigate further negative impacts, including temporarily halting select new vehicle production lines to focus on the completion of vehicles in process.

Shares in the company were down C$1.81 at C$9.80 in trading on the Toronto Stock Exchange.

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