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I guess since we are going down this road already a couple things I see.
The reduction in unit sales does not support the increase in debt. Why if you know sales where down do you keep stuffing the dealers and force new lines on them if excess inventory costs are what is killing you?
Upper management Ego? Over confidence? Incompetence?
Some local sales reps with common sense noticed this exact thing well over a year ago but upper management kept shoving these initiatives forward.
The H1 difference between motorcycle sales and production is €135 million, or annually €524 million, doesn't explain €2.9 billion in debt.
All the oem's do it. load up the dealer,The dealer flooring bank cuts the check for the units to the manufacturer. Very short sighted to bury the dealer when things are slow.
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I wonder what the MotoGP cost was, usually sponsorship is pretty good for this teams but it does cost a lot of money developing those bikes and chasing the red rabbit at the world pinnacle of a motorcycle engineering discipline they had basically zero experience in.
They reported €936.3 million in motorcycle sales H1 2024, with a volume of 147,296 units, so sales of €6,356 per unit. There would be a difference in value between a SX-E 2 and a 1390 SUPER DUKE R.
40,000 unit discrepancy from H1 2023 to 2024 would be €254 million, times 4 quarters, there's €1 billion dollars.
That’s what I don’t understand- revenue was down 27%, while not great, that shouldn’t be enough to sink a company into bankruptcy..
Debt nearly doubled…hmmmm….wtf did they spend all that money on?
Perhaps the depravity is much deeper than most can handle🤒🤔
I couldn't help it....
Dude. - that was fucking hilarious… 🤙🏼
As others have pointed out, the increase in debt seems almost inexplicable. As far as debt from inventory, inventory is sold to the dealers so their debt will increase as units sit with financing costs killing profits. The cost to KTM will be in the rebates and financing incentives (you and I may get cheap financing but someone is paying for that money). The real problem, I suppose, happens when dealers can’t take any more inventory because their floor is full (or their floor plan financing is maxed out).
I said earlier that 2022 didn’t look bad. Look at the change from 2022 to 2023. The drop in EBITA (earnings before interest, taxes, and depreciation) and the huge jump in net debt (tripled!) just jump off the page.
https://www.pierermobility.com/en/newsroom/eqsfeed/2733309?type=corpora…
Didn’t specifically look at that. Report I pulled up was hundreds of pages and I just skimmed the main indicators like year over year turnover, net income, debt to equity. .
Ktm have been cut throat… bit their throats got cut themselves.
Ill take Pankl for $100k, willing to go halves with someone to double up at 200k.
Jack Miller in MotoGp is the big winner put of this fiasco.
Lots of infos in the PMG annual and semi-annual reports, company presentations as well.
https://www.pierermobility.com/en/investor-relations/publications
As I posted in another thread, even though 2023 was PMG record year for sales (381 000 motorcycles) and revenue (2.7 billion), debt went up FAST, from 0.26 billion in 2022, 0.78 billion in 2023 and 1.47 billion in June 2024.
Basically debt doubled up in the first 6 months of 2024 and apparently kept growing at the same rate in the latter half of the year, debt almost quadrupled in a year, increased tenfold in 2 years 🤯
In 2023 financial liabilities alone ramped up from 0.5 to 1 billion, profits had already been declining in spite of record sales and revenue.
Can they get out of it? PMG have 3 billion in assets including 1 billion in intangible assets, property, plant and equipment, 0.7 billion in inventory.
Cost of racing is written at 289 million in selling and racing expenses, including 123 million in personnel expenses.
So KTM carries equivalent to 60% of the debt Suzuki carries? Not good.
KTM spends nearly 300 million a year racing?
It's written as "selling and racing expenses" so hard to pinpoint exactly what is the cost of racing.
As a start, Grand Prix is probably north of 50 million (cost is said about 70 million but one can substract Red Bull contribution, so maybe north of 50 million cost for PMG, would be 15-20% of that "selling and racing expenses" sum), then add in MXGP, SMX, Dakar, support in national classes...
From the 2023 annual report
That being said that's not likely to be what caused such a tremendous increase in debt in such a short time, I mean, times 10 in 2 years 😱
Perhaps this had something to do with compounding debt 🤔
Pit Row
This crap bums me out
And for comparison, Suzuki will sell 3.2 million autos and 2 million motorcycles this year with an estimated revenue of 39 billion US dollars and a net profit of 2.5 billion US dollars.
Thank you captain obvious, no shit it’s not good that’s why they are where they are 🤦🏼
Sorry to draw your spite and insults, but I was responding to the individual who stated all companies carry debt. "Captain obvious" is a very clever one though, I will have to remember that one in lunchroom or study hall.
Any company carrying significant debt will have this blow up in their face over the next couple of years.
When you're spending $300 million/year on racing alone, even 3 billion in revenue isn't going to be nearly enough to turn a profit.
Accountants, Ex ENRON numbers people? Ha Ha
Just waiting for the inevitable shoe to drop. Clearly some people are skimming off the top while managing loss in revenue and rapid expansion. All three items come together and wuahlah. A perfect volatile cocktail of "oh sh%t we fafo"
I don’t think so. Their auditor, KPMG, is an excellent firm. More likely that they ignored whatever concerns KPMG raised. So their internal accountants, that’s a different matter.
Finally it looks like the debt, initially valued at 2.5-3 billion is "merely" 1.8 billion, the majority of which (1.3 billion) is due to banks.
500 jobs are being terminated, half of them in R&D. Current inventory is 130 000 motorcycles and 80 000 bicycles. KTM racing is a different branch and will not be concerned by the restructuration.
As previously reported production will stop for 2 months then restart in march with one shift instead of two.
For the restructuration to have a chance, Pierer will need to put his personal assets on the table, and he probably will.
majority of debt to banks, probably accurate but a lot of suppliers are owed money as well...including those in the bike industry.
I don't think they need to have all creditors on board for the restructuration to be accepted. If they can get the banks to accept the cut, and repay in full the others smaller creditors (suppliers...), the amount of debt to repay after restructuration would be reduced in half, 0.9 billion.
Post a reply to: KTM to file for Bankruptcy/ Self Restructuring on Friday