CT Automotive (LSE:CTA) reported a 14% increase in revenue to $61.7 million for the first half of 2026, while adjusted profit before tax declined 57% to $1.6 million as margins came under pressure from higher operating costs and production inefficiencies.
Revenue growth was supported by increased demand and new programme launches at the group’s manufacturing facility in Mexico. However, gross margin declined during the period, reflecting higher administrative expenses associated with Mexican operations and inefficiencies linked to working capital.
The company also recorded a $313,000 VAT write-off, which contributed to the reduction in profitability.
CT Automotive secured six new contracts during the first half, representing approximately $6 million in annualised revenue.
The group reported a dispute with a major customer that has entered Chapter 11 bankruptcy proceedings. The customer has challenged contractual price escalation provisions relating to foreign exchange movements and inflation.
As a result, CT Automotive reduced its previously reported first-half revenue by $0.4 million to reflect the disputed pricing adjustments.
The company said negotiations with the customer remain ongoing, with the outcome potentially having a material impact on profitability.
Following these developments, the board revised its full-year 2026 adjusted profit before tax guidance to a range of $4.9 million to $9.4 million.
The range reflects uncertainty surrounding the resolution of the customer pricing dispute and its potential financial implications.
CT Automotive maintained its revenue outlook but said profitability remains dependent on the outcome of the negotiations.
The company also expects net debt to increase, citing delays in VAT recovery and customer payments as factors affecting working capital.
CT Automotive designs and manufactures automotive interior components and kinematic assemblies for original equipment manufacturers and Tier One suppliers.
The group operates manufacturing facilities in China, Mexico and Türkiye, with additional distribution and assembly operations across Europe, Asia and the United States.
Its components are used across more than 64 vehicle models supplied by 21 automotive manufacturers, including Nissan, Ford, General Motors, Volkswagen Audi Group, Bentley and Lamborghini. The company also supplies components for plug-in hybrid and battery electric vehicles.
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