Akwel first-half earnings hit by customer dispute

Champfromier, France – Automotive and heavy vehicle parts maker Akwel has reported an 87% year-on-year drop in earnings (EBITDA) for the first six months of 2025, due mainly to an client dispute related to SCR (selective catalytic reduction) tanks.

Earnings fell to €6.5 million for the first half, primarily due to the “balance of ongoing customer disputes concerning SCR tanks, resulting in an impact of €52.5 million on external costs,” Akwel said in an 18 Sept statement.

Akwel disclosed in May that it had reached a settlement with a client to resolve quality issues affecting SCR tanks, which are part of emissions-control systems used in diesel vehicles.

At the time, the company said the settlement was expected to reduce 2025 earnings by about €19 million, after applying provisions already set aside.

Akwel has not named the client involved, but earlier filings indicate that warranty and quality issues have affected the SCR product line since 2018, when the group first reported “product warranty issues” in that segment.

Last year, Akwel announced plans to phase out its decontamination systems business – which includes SCR tanks – by 2025.

However, in its latest statement on 18 Sept the group confirmed the SCR tank phase-out has been postponed to 2026.

Despite the sharp earnings decline, Akwel reported a 14% year-on-year increase in current operating income to €27.8 million, on sales of €510 million, down 3.4% year-on-year.

The group said activity was stable in the EMEA region (Europe, Middle East and Africa), but there was a “pronounced downturn” in the Americas (-10.1%) and a moderate decline in Asia (-3.4%).

In what it described as “a highly volatile market,” Akwel said it had improved factory performance in the first half, with “good control of salary costs in particular.”

Looking ahead, Akwel said the global automotive market remains weak, and projects related to electric motors are “less dynamic than expected.”

Nevertheless, the group noted that partnerships with strategic customers have shown “good resilience,” helped by the delayed SCR tank phase-out.

“The group remains focused on its strategic priorities, developing its product potential as part of the transition to electric vehicles, optimising its operational performance to remain agile,” Akwel concluded.