Formula E records fifth successive loss despite revenue rise
Formula E, the international electric car racing series, recorded a loss for the fifth consecutive year despite an increase in turnover.
The series' financial accounts for the year ending 31 July, 2018 showed a pre-tax loss of €26.4 million ($29.5 million), up 26.7 per cent from the previous year's deficit of €20.8 million, meaning it has yet to turn a profit since launching in 2014.
Formula E’s accumulated losses over five years amount to $185 million.
However, there were positives for Formula E as it generated €133.4 million in 2017-18, up from €94.5 million a year earlier, the result of a new race in Saudi Arabia and a title sponsorship deal with ABB, the Swiss industrial company.
ABB signed a nine-figure deal with the series last year, which runs to at least 2025.
Sponsorship deals with Bosch and Heineken also contributed to the increased revenue.
The Saudi Arabia E-Prix debuted on the calendar through a 10-year hosting agreement between Formula E and Saudi Arabia, reported to be worth $260 million, which represented the series’ first venture into the Middle East.
However, the increase in Formula E turnover was outstripped by a €44-million rise in costs as the series added new staff and spent a significant amount on the development of a new car, which was launched in the 2018-19 season.
Some 78 per cent of Formula E’s revenue comes from licensing fees and hosting contracts. There are presently 13 stops on the calendar, including New York, Rome, Paris and Monaco.
Formula E recently announced plans to stage a race in London’s Docklands area in its sixth season, in a multi-year agreement with ExCeL, the exhibition centre in the east of the UK capital.
The series also signed an agreement to continue to race in Paris for a further three seasons.
In 2017-18, television viewership for Formula E rose from 223 million to 330 million worldwide, while spectator numbers came to 476,000, more than double the 220,000 that attended the previous year.
New sponsors and teams are expected for season six, beginning later this year. Porsche and Mercedes are among the new manufacturers for the 2019-20 campaign, joining Audi, BMW, Jaguar and Nissan.
Formula E’s net liabilities stood at €154 million for 2017-18, up from €128 million in the previous year, and the accounts showed that the company’s solvency is dependent on support from its parent company, Formula E Holdings.
Formula E Holdings’ biggest shareholder is Liberty Global, which holds a 23.9 per cent stake and is headed up by US billionaire John Malone, who also owns Liberty Media, the parent company of Formula 1.
A statement in the Formula E accounts read “The group successfully closed another round of funding, raising approximately €10.5m ($11.7 million) of equity. The consideration was partly used to repurchase back some of the base shares from the chief executive of the group [Alejandro Agag] for €5 million (US$5.5 million).”
Formula E announced last December that it would be seeking a new chief executive after Agag announced plans to transition to the role of chairman.