Daimler has posted a first quarter decline to net profit despite achieving higher revenue than last year; the company said the drop was mainly down to the comparison with last year’s quarter which had large positive special reporting items.

Daimler Q1 unit sales were 7% above prior-year level at 806,900 vehicles and revenue was up by 3% to EUR39.8bn, a gain of 8% after adjusting for exchange-rate effects.

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Group EBIT for the quarter was EUR3.3bn (-12% on last year) but positive special reporting items of EUR700m included in first quarter 2017 created a high base for comparison.

Net profit in the first quarter was EUR2.4bn (-11% on last year).

In the Mercedes car division there were negative effects on earnings from ‘advance expenditure for new technologies and future products and higher expenses for raw materials’ the company said. Q1 EBIT in the Mercedes-Benz car division was up 3% on last year at a little over EUR2bn. The improvement was ‘mainly due to the very positive development of unit sales of the S-Class and SUV models’, Daimler said.

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Daimler Trucks’ earnings were at the prior-year level.

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Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars said: “We are sustainably continuing along our profitable growth course and sold more vehicles than ever before in a first quarter.”

Bodo Uebber, Member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Financial Services said: “We made a good start to the year and have continued investing in the future. With our strong balance sheet and good earnings, we are setting the course for a successful future for the company and for mobility.”

In the first quarter of 2018, EUR1.3bn was invested worldwide, primarily at the production and assembly sites for new products and technologies and for the expansion and modernisation of production facilities. The sites in Germany accounted for EUR1.1bn of capital expenditure (Q1 2017: EUR0.9bn). Research and development expenditures increased to EUR2.3bn (Q1 2017: EUR2.1bn).

Compared with 2017, Mercedes-Benz Cars plans to achieve a slight increase in unit sales to set a new record level in full-year 2018. The Chinese market is seen as the strongest volume growth driver.

Daimler now assumes that Group EBIT in 2018 will be slightly higher than in the previous year.