Citing poor vehicle and component sales, Fiat has reported a 299 million euro loss for the first quarter of 2002, compared with a profit of 125 million euros in Q1, 2002.
Noting that the results for Q1 2002 were “roughly in line with those of the last three months of 2001”, Fiat said revenue of 14,100 million euros was about 6% down on the same period last year, as lower unit sales in the vehicle and components sectors were offset only partly by gains by the service operations.
The group loss for Q1 2002 was 529 million euros compared with a193 million euro profit for the first three months of 2001, when extraordinary income of about 400 million euros was booked.
Net debt at March 31, 2002 was 6.6 billion euros, or about 570 million euros more than at the beginning of the year. A recent capital increase and asset sales, which added about 1.3 billion euros, were offset by a normal seasonal increase in working capital requirements of about 550 million euros and capital expenditures that exceeded the resources generated internally during the period by about 620 million euros.
Fiat said its automotive markets were characterised by rapidly falling demand during the first three months of the year with the car market contracting 4% in Europe and 13% in Italy compared with the first quarter of 2001.
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By GlobalData“The slumping Polish and Argentine markets showed no signs of a turnaround, and the slowdown that became apparent in Brazil during the closing months of 2001 seemed to intensify,” the company said in a statement.
European sales of commercial vehicles decreased by 12% overall, with the heavy-range segment plummeting 17%.
During Q1 2002, Fiat Auto reported revenues of about 6 billion euros, or 11.2% less than in the same period last year.
The company sold 518,000 vehicles (-14.9%), reflecting weakness, especially in Italy, and an erosion of Fiat Auto’s market share, which fell to 33.5% in Italy and 9.3% in Europe.
The contraction of the Polish, Argentine and Brazilian markets also had a heavy impact on Fiat Auto sales and led to an operating loss of 429 million euros compared with a loss of 16 million euros in Q1 2001.
Lower unit sales, higher R&D spending and an increase in provisions – required by the extension of the warranty period to two years – could not be fully offset by lower production costs and savings generated through the alliance with General Motors.
Iveco, which consolidated Irisbus results for the first time, reported revenues of 2.1 billion euros, or 2.2% more than Q1 2001.
Although demand was down throughout Europe, with unit sales down 6.4% compared with last year a new product line helped Iveco to an improves market share in all segments: light commercial vehicles (+0.5%), medium-range vehicles (+6.8%) and heavy-range vehicles (+1.3%).
However, the decline in unit sales, coupled with strong competitive pressure, affected operating income which fell to 11 million euros compared with 64 million euros in Q1 2001.
Component operations (Magneti Marelli, Teksid and Comau) were affected by slumping vehicle sales and reported a combined operating loss of 33 million euros, compared with operating income of 17 million euros in the first quarter of 2001.
“In the coming months, the Fiat Group will focus on carrying out the divestiture programme previously announced and aimed at reducing the group’s indebtedness [and] will fully implement a stringent action plan aimed at helping Fiat Auto return to profitability,” the statement said.
“The main markets where the group operates are not expected to show significant improvements over the first quarter levels. Demand for automobiles will remain weak, especially in Italy.”