ZCZC
BCN-28
GERMANY-AUTOMOBILE-EARNINGS-BMW
BMW profit dips in ‘volatile’ times
FRANKFURT AM MAIN, Nov 7, 2018 (BSS/AFP) – German high-end carmaker BMW on
Wednesday posted a steep drop in quarterly profit as new EU emissions tests,
global trade tensions and costly recalls weighed on the bottom line.
The Munich-based group said net profit between July and September slumped
24 percent year-on-year to 1.4 billion euros ($1.6 billion), falling short of
analyst expectations.
Third-quarter revenues were up 4.7 percent to 24.7 billion, supported by
brisk demand for the group’s vehicles which include the compact Mini and
luxury Rolls-Royce.
The group had already issued a rare profit warning in September when it
was forced to lower its full-year outlook in the face of a series of
setbacks.
Chief among them was the introduction of tough new EU pollution tests
known as WLTP, which sent rival carmakers scrambling to shift non-compliant
models before the September 1 deadline.
This resulted in “unexpectedly intense competition”, BMW said.
The group has also been unnerved by US President Donald Trump’s festering
trade row with China and his threats to slap steep tariffs on auto imports
from the European Union.
“The ongoing international trade conflicts had the effect of aggravating
the market situation and feeding consumer uncertainty,” said BMW, which owns
factories in Europe, the US and China.
The automaker also felt the pinch from a mass recall of diesel-powered
cars over a fire risk in the third quarter, and increased spending on
electric and self-driving cars.
“Particularly in these volatile times, we are maintaining our focus on the
future and taking the decisions that will lead to tomorrow’s success,” said
chief executive Harald Krueger.
BMW confirmed its trimmed outlook for 2018, forecasting revenues from its
car business “slightly lower” than last year, rather than the slight increase
previously expected.
Group-wide profit before tax “is expected to show a moderate decrease”
year-on-year, rather than staying around last year’s level of 10.7 billion
euros.
BSS/AFP/HR/1400