Despite cost rises, BMW Group increased sales volume, revenues and earnings figures for the third quarter 2007 and is well on its way towards achieving its earnings and sales volume targets for the full year, the Munich-based automaker said on Tuesday. Nine-month profit numbers were not so rosy, however.
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Third-quarter revenues rose 19.2% to EUR13,778m (EUR11,557m a year ago) on the back of increased sales volumes. Profit before tax improved 6.3% to EUR765m (EUR720m) while the net profit rose even more sharply by 77.7% to EUR803m (EUR452m) partly as a result of tax effects.
Nine-month revenues grew 11.1% to EUR40,412m (EUR36,368m) but group profit before tax fell 17.4% to EUR2,682m (EUR3,248m).
Adjusted for the exceptional gain on the partial settlement of the exchangeable bond on shares in the British aero engine manufacturer, Rolls-Royce, the profit before tax would have decreased by 9.4%. The group profit after tax was 2% lower at EUR2,143m (EUR2,187m).
“Excluding the exceptional gain on the Rolls-Royce exchangeable bond, the BMW Group is still aiming to post a current year profit before tax that will be higher than the previous year’s record figure,” said BMW chairman Norbert Reithofer in Munich today.
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By GlobalDataThe company is also heading towards a sales volume for the year of over 1.4m vehicles, with growth in the high single-digit percentage range. All three brands are forecast to achieve new retail sales volume records.
January to September earnings were affected by various factors including the cost of market launches and production start-ups for numerous new models, high raw material costs, substantial expenditure for the development of efficient and fuel-saving engines and the on-going weakness of the US dollar and Japanese yen.
Thanks to hedging, full-year exchange rate factors will not exceed the EUR666m recorded last year, BMW said. The company was also hit by higher steel, precious metals and other materials pricing. The additional cost is likely to be on a similar scale to the previous year’s level of EUR178m.
Third-quarter sales rose 12.8% to 364,564 units (323,064). Cars sold during the first nine months of the year increased 7.2% to 1,094,849 units (1,021,534)
BMW said the EfficientDynamics technology to optimise performance and fuel consumption gave the company a real competitive advantage and a positive impact on sales performance, and forecasts that some 700,000 vehicles in Europe will have been equipped with the technology by 2008.
By the end of this year, the figure is likely to be about 400,000.
BMW brand sales rose 6.3% to 929,379 units (874,208). Q3 sales rose 10.8% to 306,964 units (277,088).
Mini sales in the third quarter rose 25.2% to 57,315 units (45,788). Sales for the nine-month period increased 12.3% to 164,891 units (146,851).
Rolls-Royce sales rose 21.9% to 579 units (475) thanks to the new convertible model which has been available since July. Q3 sales surged 51.6% to 285 units (188).
Third-quarter revenues of the automobile segment grew faster than sales volume, rising 18.2% to EUR13,107m (EUR11,088m). Profit before tax improved 15.2% to EUR704m (EUR611m) on the back of a good sales volume performance. Segment revenues for the nine-month period amounted to EUR38,782m (EUR35,262m), 10.0% ahead of last year.
But profit before tax fell 8.8% to EUR2,114m (EUR2,319m), adversely affected by exchange rate fluctuations, higher raw material prices, market launch and production start-up costs for new models and higher research and development costs.
Nonetheless, BMW forecasts that full-year earnings of the automobile segment will surpass the previous year’s result.
“Following the successful launch of various models in recent months, we forecast an even faster sales volume growth rate in the fourth quarter 2007 which will increase earnings of the automobile segment”, said Reithofer.
