© Reuters. FILE PHOTO: The company logo of auto parts maker Valeo is seen outisde a factory at Etaples, northern France, December 28, 2020. REUTERS/Charles Platiau

PARIS (Reuters) -French car parts maker Valeo (PA:) on Thursday confirmed its 2021 financial outlook as it posted increased first-half sales and profit, adding it expected the shortage of key technology chips to ease.

Valeo’s first-half earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 1.21 billion euros ($1.41 billion) from 202 million a year earlier, while sales rose to about 9 billion euros from 7.1 billion.

“In a challenging environment marked by a shortage of electronic components and rising raw material prices, we can confirm our objectives for full-year 2021,” said Valeo chairman and CEO Jacques Aschenbroich.

Valeo’s 2021 financial outlook forecasts growth in global automotive production of around 9%, sales between 17.6-18.2 billion euros from 16.4 billion in 2020, and free cash flow between 330-550 million euros, up from 294 million in 2020.

Aschenbroich said he expected the global auto industry was at the peak of issues regarding a shortage of chips, and that the situation would improve between now and the end of the year.

South Korea’s Hyundai Motor Company (OTC:) also said this week it expected the global chip shortage to become less acute in the second half of the year.

Semiconductors are essential to the production of integrated circuits or chips, and modern, technologically advanced cars use a multitude of sensors and controllers which rely on chips to send information throughout the vehicle. (reut.rs/3y2zdYH)

Earlier this week, Texas Instruments (NASDAQ:) said it would be ramping up its production capacity – which would ease issues regarding the shortage of those technology chips.

($1 = 0.8502 euros)

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