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BERLIN (Reuters) -Shares in German auto parts manufacturer Vitesco Technologies rose 12% in their market debut on Thursday, which marked the company’s long-awaited spinoff from former parent Continental.
Vitesco shares started trading at 59.80 euros per share and rose to as much as at 66.88 euros, giving the group a market valuation of 2.68 billion euros ($3.2 billion). Shares in Continental were down 12.6%.
Continental shareholders received one Vitesco share for every five shares they hold in Continental as part of the spin-off, resulting in 40 million Vitesco shares overall.
Currently, five Continental shares and one Vitesco share are still worth about 1% less than five Continental shares at Wednesday’s market close.
Continental, among the world’s largest auto suppliers, delayed the spinoff of Vitesco – which produces powertrains for internal combustion engine (ICE (NYSE:ICE)), hybrid and electric cars – by two years due to unfavourable market conditions worsened by the coronavirus pandemic.
“We were confronted by developments that no one had foreseen,” Vitesco CEO Andreas Wolf said at the Frankfurt stock exchange, adding “the corona crisis fully confirmed our strategy… e-mobility is booming.”
While the powertrain components’ maker currently earns the vast majority of its revenue from parts for ICE cars, Wolf told Reuters this month he hopes to break even on sales for electric vehicle components by 2024 and reap three quarters of revenues from electric vehicle parts by 2030.
In 2020, Vitesco’s sales fell 12% to 8 billion euros as the COVID-19 pandemic combined with a global chip shortage and rising raw material supplies stymied sales across the auto industry.
Still, sales in the first half of 2021 were up 29% on the previous year at 4.4 billion euros, with a profit margin of 1.9%.
Continental is holding onto 20,000 Vitesco shares, but intends to sell them on the market after the spin-off is complete.
($1 = 0.8488 euros)
