Fiat Group has reported a small trading profit gain for the third quarter but warned of deteriorating demand conditions that could impact the company’s financial outlook.
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“The events we have witnessed in this quarter have significantly changed the quality of the trading conditions which our sectors will face in the last quarter of this year and, in our view, for the major portion of 2009,” Fiat said.
Fiat said it believed the ‘erratic’ conditions in financial markets were temporary and insisted they would not impact the ‘overall substance’ of the company’s turnaround targets.
But it said it had modelled a number of possible scenarios should the turmoil continue and promised to update investors quarterly on its expected 2009 performance as things became clearer.
The company reported a group trading profit of EUR802m in Q3, up 8% on last year and with margins improving to 5.6% from 5.4% driven by increased volumes in agricultural equipment and efficiency improvements across all sectors. Third quarter net profit (before minority interests) was EUR468m, compared to EUR454m for the third quarter of 2007.
For the third quarter, Fiat Group Automobiles – which accounts for around half of Fiat Group’s revenues – had trading profit of EUR190m (2.9% of revenues), an improvement over the EUR185m figure (2.8% of revenues) reported for Q3 2007.
Fiat said the decrease in volumes in Western Europe and higher selling expenses associated with the launch of new models were substantially offset by the positive performance in the Brazilian market and better product mix. However, deliveries were down. Fiat Group Automobiles delivered a total of 516,700 units in the third quarter, down 4.8% over Q3 2007.
In Western Europe, 268,200 vehicles were delivered, representing a 12% decrease attributable to ‘decidedly weak markets’. Deliveries in Italy were down by a fifth on last year. The company said share was up on the back of strong-selling small cars such as the Fiat 500 and Panda.
Fiat Group Automobiles reported trading profit of EUR626m for the first nine months (2.9% of revenues). The 9.8% improvement over the EUR570m figure (2.9% of revenues) for the same period in 2007 was driven by higher volumes, a more favourable product mix and, in particular, positive performance in the Brazilian market, the effects of which were partially offset by non-recurring costs related to the temporary closure of the Giambattista Vico plant.
