BMW recorded a pre-tax profit drop of over 34% to EUR852m in the first quarter of 2007, which it attributed to adverse currency factors, high raw material prices and high start-up costs for new models.
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BMW said that the decline in reported earnings was also affected by a significant “base effect”, namely a one-off non-cash gain that was recognised in the first quarter last year arising on the partial settlement of an exchangeable bond on shares in the British aero engine manufacturer, Rolls-Royce plc. Excluding exceptional items, group earnings fell by 11.7%.
The first-quarter profit after tax, at EUR587m, was 38.1% lower than the previous year’s figure of EUR948m.
First-quarter revenues in 2007 rose by 2.9% to EUR11,951m.
BMW said the first quarter performance corresponds fully to its expectations. “We expect business to increase noticeably in the coming months,” stated Norbert Reithofer, the Chairman of the Board of Management of BMW AG on Thursday in Munich. “Three months into the year, we are right on course to achieve our targets for the full year. In addition to increasing sales volume in the high single-digit percentage range to over 1.4 million vehicles, the BMW Group is aiming to achieve a pre-tax profit, which, adjusted for the gain on the Rolls-Royce exchangeable bond, will be above the record level posted for the previous year”, continued Reithofer.
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By GlobalDataCurrency effects and high raw material prices will continue to have an impact on reported results, albeit to a lesser degree than in the previous year, said the company in a statment. By contrast, earnings will benefit in particular from the targeted sales volume record, with all three brands achieving new sales volume records.
BMW has already launched several new models this year. They include a revised 1 Series, 5 Series Sedan and Touring, the new BMW X5 and the new Mini. Several new Mini models will be launched later this year – namely the MINI One and the MINI Cooper D at the end of April, and the MINI Clubman later in the year. The three-door version of the BMW 1 Series will become available from May onwards, and the BMW M5 Touring at the end of May. Delivery of the first Rolls-Royce Phantom Drophead Coupés is planned for summer 2007.
The BMW Group sold more vehicles in the first three months of the current year than ever before in a first quarter. Despite model changes during the quarter under report, the number of BMW, MINI and Rolls-Royce brand cars edged up by 0.1% to 333,276 units, up from 332,923 in the previous year units. The sales volume is expected to rise sharply in the coming months, thanks to the new models.
