Fiat has posted a first quarter net loss of EUR411m which compares with a net profit of EUR427m in the same quarter last year. The result was hit by lower volumes in major markets and was significantly worse than analysts’ expectations.
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It was Fiat’s first quarterly loss since 2004, prior to a financial turnaround orchestrated by the mercurial Sergio Marchionne.
Fiat Group’s Q1 revenue, which includes the sales achieved by group units Iveco and agricultural machines producer CNH as well as Fiat Powertrain Technologies and Magneti Marelli, was EUR11.3bn, down 25.3% on last year.
However, the firm said it still expects to generate a full-year profit of at least EUR100m, a forecast seen as optimistic by some analysts.
Fiat Group Automobiles reported a trading loss of EUR30m compared with an EUR193m trading profit for the first quarter of 2008. The company said the decrease on its automotive operations was attributable to the ‘significant contraction in volumes, particularly at the beginning of the quarter’ and said that was ‘partially offset by significant cost containment actions’.
Fiat said it expects an improvement in the remainder of the year, ‘as trading conditions stabilise
and improve for most of our businesses’.
Fiat Group’s forecasts for 2009:
- Global demand for Fiat Group our products will decline by 20% compared to 2008;
- Group trading profit will be in excess of EUR1bn (or a minimum margin of 2%);
- There will be restructuring charges of EUR300m and other unusual costs of EUR200m;
- The net earnings result for the Group will be in excess of EUR100m;
- Group net industrial cash flow will be in excess of EUR1bn, with net industrial
debt levels below the EUR5bn mark.
Fiat is at the centre of auto industry restructuring moves in America and Europe. It faces an end-April US government deadline to announce a tie-up with Chrysler, but it has said that it won’t invest cash in the ailing US firm.
Speculation has risen lately that the firm is interested in taking a stake in GM’s European operations, which GM has said it will invite outside investors to.
