The Fiat group on Friday reported that its operating profit surged to €142 million ($US176.6 million) in the fourth quarter but its Fiat Auto car unit posted an operating loss of €97 million, near the most pessimistic forecasts.
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Analysts polled by the Reuters news agency had forecast Fiat Auto’s loss would narrow to €20 million from €180 million a year earlier and, at group level, Fiat was expected to report a core profit of €120 million euros, up from €3 million in the last quarter of 2002.
In a statement cited by Reuters, Fiat said it closed 2003 with a net loss of €1.9 billion, recovering from a record loss of €4.3 billion in 2002, when a slump in car sales and high debt forced Italy’s biggest industrial group to sell assets and restructure.
Analysts had forecast a net loss of €1.2 billion euros, Reuters noted.
The report said that Fiat was sticking to its forecast that it would break even on an operating level this year and on a net basis in 2005 – it reportedly said operating losses at the auto unit would narrow throughout this year.
“Until there is a profit, I will not be happy,” chairman Umberto Agnelli reportedly told a news conference, adding: “The result still carries an important loss but I am satisfied with the work carried out by (CEO Giuseppe) Morchio’s management.”
Reuters said the company’s fourth-quarter group loss was €1.11 billion, narrowing from €2.97 billion a year-ago. “The last quarter of the year already shows substantial improvements and we begin 2004 in better conditions,” Agnelli reportedly said, adding: “We hope to meet the objectives set out in our plan and I am sure we will.”
“The results are a little worse than expected,” one auto sector analyst told the news agency.
Reuters noted that Fiat had long said 2003 would be a year of transition before the group pulled to operating breakeven in 2004. For the full-year, 2003’s operating loss shrank to €510 million from €762 million the year before.
Turnover at the tractor-to-robotics group fell to €12.66 billion in the fourth quarter from €14.91 billion the year before, when Fiat still owned insurer Toro and Fiat Avio, which it sold last year to help fund a turnaround of its core car business, the report added.
Reuters said Fiat Auto sales totalled €5.71 billion in the last quarter of 2003 – the first full period to benefit from the new Fiat Panda and Lancia Ypsilon – flat on the previous year, when sales were boosted by government incentives.
Fiat Auto’s operating loss for the full year came in at €979 million euros against €1.34 billion euros in 2002, the report said, while net debt for the group was €3 billion euros at the end of December.
According to Reuters, Fiat had slightly under 1.7 million cars last year, down 8.8% from 2002 when sales were already weak.
