GERMANY: BMW Group achieves record Q1 earnings
BMW Group has reported record Q1 2006 results with pre-tax profit up 12.0% before exceptional gain. Pre-tax profit rose 57.7% to EUR 1.296bn.
The company also confirmed its earnings and sales volume outlook for the full year, said that the number of cars sold in the first three months also represented a new high and added that it is still heading towards its best year ever.
"We are well on our way to achieving our target of a group profit before tax of EUR4bn," said BMW chairman Helmut Panke on Wednesday.
"We also expect earnings to increase in 2006 at an operating level excluding the exceptional gain from the exchangeable bond on Rolls-Royce plc shares".
First quarter results were affected by "external factors" and a one-off gain of EUR375m on the Rolls-Royce share bond.
Group revenues rose 12.2% to EUR11,618m from EUR10,357m a year ago but adverse currency effects and high raw material prices in the first three months continued to have a negative impact on earnings though this was compensated for by on-going efficiency improvements.
Profit before tax increased 57.7% to EUR1,296m. Excluding the gain on the partial settlement of the Rolls-Royce share bond, pre-tax profit rose 12.0% to EUR921m.
Profit after tax rose 80.6% to EUR948m from EUR525m a year ago.
Earnings per share rose to EUR1.44 from EUR 0.78 in 2005.
"Currency effects and high raw material prices will continue to have an impact on business development in the current year, however to a lesser degree than in the previous year," BMW said in a statement.
"This negative effect is partly attributable to the fact that less favourable currency hedge rates are in place than in the previous year; the effect will be felt mainly in the first half of 2006. The BMW Group will counter this development by means of continuous efficiency and productivity improvements."
The record sales target and improvements in product mix will also make a positive contribution to earnings.
"In terms of operating results, the current year, excluding the one-off gain, will therefore be the best year in the company's history to date," said Panke.
"We will continue our profitable growth course in the coming years and generate above-average returns compared to the industry as a whole," he added.
New models due soon include the the Z4 coupé and M coupe in June and a fully redesigned 3 series coupé in September.
The number of BMW, Mini and Rolls-Royce brand cars sold in the first quarter of 2006 increased 13.9% to a record 332,923 units.
BMW brand sales were up 18.3% to 283,297 units while Mini volume fell 6% to 49,519 units due to production capacity expansion work at the Oxford plant in the UK.
Rolls-Royce sales were also off - by 15.1% to 107 Phantoms. The extended wheelbase version launched in the Middle East and Asia/Pacific regions in 2005 will be available in the Americas region and in Europe in 2006.
Automobile segment revenues, though adversely affected by currency factors and higher raw material prices, benefited from a sharp rise in sales volume and favourable changes in the product mix and selling prices to increase 12.8% to EUR11,231m.
Profit after tax improved 7.2% to EUR 761m.