GERMANY: Still in black but BMW profits fall
BMW Group managed to stay profitable in the third quarter of 2009 but EBIT fell to EUR55m from EUR387m a year ago and pretax profit was EUR126m versus EUR279m on revenues off 7% to EUR11,759m.
Creative Global Investments analyst Sabine Blümel had estimated group EBIT at EUR231m for the third quarter.
Nine-month revenue fell 10% to EUR36,239m, EBIT was down 90% to EUR169m, pre-tax profit was off 95% to EUR79m and the net profit was down 96% to EUR47m.
"The measures we have put in place to increase efficiency and reduce costs are taking effect," BMW chairman Norbert Reithofer said in a statement.
"We are aiming to achieve positive group earnings for the current financial year" on the assumption that the global economy and conditions in car markets do not worsen during the rest of the year.
BMW said its main markets again experienced reduced consumer spending in the third quarter with intense competition amidst unfavourable business conditions.
"The BMW group was unable to avoid the effects of these developments."
Third quarter deliveries fell 7.2% to 324,100 units.
Nine-month vehicle deliveries (excluding motorcycles) fell 15.7% to 939,554 units but BMW said new models like the X1 SUV and 5 series GT should lead to an increase in the last quarter.
Overall, the company expects that the sales volume decrease for the full year will be between 10% and 15%.
"It is still too early to give the all-clear for the world's automobile markets," said Reithofer.
"We expect that the markets will make a gradual recovery over the coming year."
The automaker expects further momentum between 2010 and 2012 when new versions of high-selling models go on sale.
The aim for automobiles in 2012 is still to achieve a return of sales (EBIT) of between 8% and 10% and a return on capital employed (RoCE) of more than 26%.
Financial services, however, did well. Though third-quarter revenues fell to EUR3,831m from EUR4,084m, the pre-tax profit improved to EUR94m (from a EUR17m loss in 2008).
Nine-month revenues rose to EUR12,058m (from EUR11,818m) and pre-tax profit was EUR247m (EUR131m).
Global workforce at the end of the third quarter was down 5% to 98,358 employees with BMW noting that natural fluctuation, pre-retirement part-time working, arrangements and voluntary employment contract termination agreements have been used to achieve this.
Recruitment of R&D specialists and apprentices is continuing, however.