BMW boosts Q3 profits, says on track for weak 2019

A general view of the headquarters of German luxury carmaker BMW in Munich, March 18, 2015. BMW’s bottom line swelled 11.5 per cent to over €1.5 billion, lifted by the comparison to 2018’s weak third quarter that was weighed down by new emissions tests. — Reuters pic
A general view of the headquarters of German luxury carmaker BMW in Munich, March 18, 2015. BMW’s bottom line swelled 11.5 per cent to over €1.5 billion, lifted by the comparison to 2018’s weak third quarter that was weighed down by new emissions tests. — Reuters pic

FRANKFURT, Nov 6 — German carmaker BMW said today it was on track to hit performance targets for 2019 despite “difficult conditions”, after the third quarter brought rising sales and profits.

BMW’s bottom line swelled 11.5 per cent to over €1.5 billion (RM6.9 billion), lifted by the comparison to 2018’s weak third quarter that was weighed down by new emissions tests.

“We are performing at a high level in comparison with our competitors and considering the difficult conditions our business is facing,” chief financial officer Nicolas Peter said in a statement.

Chief executive Oliver Zipse said BMW was “well on our way to reaching our targets for the year as a whole.”

But bosses’ objectives call for pre-tax profit to fall “significantly below” 2018’s level over the full year.

Between January and September, the measure fell 35 per cent year-on-year.

BMW’s profits met forecasts from analysts surveyed by Factset, but it was able to beat expectations on revenue — up 7.9 per cent, at €26.7 billion — and operating, or underlying profit, which gained 32.9 per cent to reach €2.3 billion.

The group operating margin, closely watched by investors, increased one per centage point, while the automobile division alone added 2.2 points year-on-year.

Over the full nine months, BMW’s earnings have been weighed down by €1.4 billion of provisions it had to set aside over a European Commission cartel probe.

Brussels accuses BMW, Volkswagen and Daimler of secret deals not to compete on emissions reduction technologies.

Meanwhile, the group added that its results were also lifted by cost-cutting measures, as BMW — like other carmakers — looks to foot the bill for costly investments in new technologies such as electric and autonomous driving.

It aims to find €12 billion of annual savings “by the end of 2022”.

One key measure will be slimming down BMW’s product line, with half its combustion-powered cars slashed in favour of electric models from 2021. — AFP

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