GERMANY: Daimler anticipates positive earnings to continue in fourth quarter
- EBIT in Q3 2009 of EUR470m (Q2 2009: minus EUR1,005m)
- Third-quarter net profit of EUR56m (Q2 2009: net loss of EUR1,062m)
- Third-quarter revenue of EUR19.3bn (Q2 2009: EUR19.6bn)
After returning to profitability in the third quarter of this year, Daimler said it expects positive earnings to continue into the final quarter despite the general economic situation although its effects on dealerships and suppliers could lead to an impact in the fourth quarter.
Chairman Dieter Zetsche said: "In recent months, we have increasingly mastered the crisis. Daimler has been able to maintain its financial flexibility and has intensified the actions taken to enhance efficiency, while pushing forward with the development of new products and markets.
"We are now very well positioned and can look with confidence to the coming year, which will remain challenging due to the still-difficult situation of automobile markets worldwide."
Daimler anticipates significant decreases in sales and revenue for the full-year 2009 versus 2008 when it sold 2.1m vehicles with revenue of EUR95.9bn (US$143.2bn).
The group has taken measures to cut costs and avoid additional expenditure, including reducing fixed and material costs, cutting labour costs and streamlining organisational structures. The company now assumes that it will surpass the original target of saving a total of EUR4bn (US$6bn) in full year 2009.
Zetchse said Daimler has a sound financial position, which should remain stable during the fourth quarter. Due to its current very high levels of liquidity, it is intended to make use of the capital markets to only a slight extent during the rest of this year.
Due to higher payments to suppliers and a seasonal inventory increase at the end of the year, the group forecast a negative cash flow in the fourth quarter. For full year 2009, it expects a positive free cash flow in the industrial business.
Sales of Mercedes-Benz Cars are expected to continue to improve in the last quarter thanks to recently launched new or updated models.
However, Zetsche added that Mercedes-Benz would not be able to fully compensate for the weakness during the year to date of some important sales markets and market segments so overall, unit sales would be lower than last year with lower volumes in the US, Western Europe and Japan, partially stabilised by growth in emerging markets, particularly in China.
Truck orders have improved in recent months although the division also anticipates a significant decrease in sales this year as a result of lower demand for transport services and underutilised transport capacities.
It forecast its share of the truck market would at least remain stable in the major markets, although its regional mix would change. While unit sales would rise in Asia, European markets' share of total unit sales would decrease.
Restructuring Daimler Trucks North America and Mitsubishi Fuso Truck and Bus Corporation would reduce EBIT again in the fourth quarter of 2009.
As already announced last week, Daimler posted group EBIT of EUR470 m (US$702m) in the third quarter of 2009 vs Q3 2008: EUR648 m (US$968m). Group EBIT had amounted to minus EUR1bn (US$1.5bn) in the second quarter.
Net profit for the third quarter amounted to EUR56m (US$83.6m) vs Q3 2008: EUR213m (US$318m) and Daimler sold 386,500 cars and commercial vehicles worldwide, 26% fewer than in the prior year quarter.
Daimler's revenue fell to EUR19.3 bn (US$28.8 bn) from EUR24.5 bn (US$36.6 bn) in the third quarter of 2008.