BMW Group said sales volume and revenues set new records in the second quarter of 2012 and confirmed its targets for the full year.
Second-quarter revenues rose 7.3% to EUR19,202m (2011: EUR17,888m) but greater investment in new technologies and higher personnel costs reduced EBIT 19% to EUR2,270m for an operating margin of 11.8%. Pre-tax profit fell 25.4% to EUR1,977m and net profit 28.1% to EUR1,277m.
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“Higher personnel costs, increased expenditure on development and new technologies, intense market competition and the higher baseline of the previous year’s record second-quarter earnings all contributed to the lower earnings figures in 2012,” the automaker said in a statement. “Second-quarter earnings in the previous year included a positive exceptional effect of EUR464m arising from the adjustment of residual value and credit risk provisions.”
Nonetheless, profit benefited from increased sales due to the “young and attractive model range and to efficiency improvements”.
Vehicle unit sales from April to June 2012 rose 5.4% to a record 475,011.
Half year revenues increased 10.5% to EUR37,495m, EBIT dipped 4.2% to EUR4,402m and pre-tax and net profits respectively were EUR4,053m (-6.9%) and EUR2,626m (-10%).
Sales volume rose 8.1% to a new high of 900,539 units.
“We have achieved new sales volume and revenue highs as well as the second best operating profit in the company’s history,” chairman Norbert Reithofer said.
Second-quarter EBIT margin 11.6% for automotive segment
Automotive segment revenues increased 4.2% in the second quarter to EUR17,366m, EBIT fell 16.1% to EUR2,021m. EBIT margin was flat at 11.6%.
Pre-tax profit fell 23.8% to to EUR1,751m.
Half-year auto revenues climbed 8% to EUR33,525m, EBIT fell 5.3% to EUR3,899m (EBIT margin was also 11.6%) and pre-tax profit was down 8.5% to EUR3,571m.
BMW said the euro crisis and high public sector debt levels in a number of countries could cause the global economic climate to cloud over further during the second half of the year.
“We are monitoring developments very closely in various markets. The group has a flexible production network and, as a premium manufacturer, is focused on maintaining profitable growth,” said Reithofer.
“We still aim to exceed our previous year’s sales volume and pre-tax earnings in 2012.”
New technologies and production investments will result in higher expenditure for the automotive segment in full year 2012. A deteriorating market climate could also have a perceptible impact on business. Despite these factors, the group continues to target an EBIT margin of between 8% and 10% for automotive and, provided the global economic climate does not take a further turn for the worse, forecasts an EBIT margin for 2012 at the upper end of this target range.
The group sees risks primarily in a further deterioration of the economic situation in Europe and a slowdown of growth in China.
