Finance

Finance

BMW profit plunges on low demand

03 November 2009 15:41 (UTC +04:00)

Baku - APA-Economics. German carmaker BMW AG said Tuesday its net income fell 74 percent in the third quarter as it continued to be affected by the global economic downturn, AP reported.
BMW, the world’s biggest luxury car company by sales, said net income for the period amounted to â‚¬78 million ($115 million), down from â‚¬298 million in the July-September period of 2008.
BMW’s share price slid 7.1 percent to â‚¬31.20 in Frankfurt after the earnings announcement as net income came in well below the consensus estimate of around â‚¬150 million.
The Munich-based company said it delivered 7.2 percent fewer cars during the July-September period and that its revenue fell 6.6 percent to â‚¬11.8 billion from â‚¬12.6 billion in the July-September period of 2008.
"Although there are some emerging signs that the lowest point of the current economic downturn has been passed, the BMW group only expects the situation to stabilize at a low level during the last quarter of 2009," BMW said in its report.
"For the time being at least, it cannot be assumed that an enduring recovery has taken hold. Nevertheless the BMW group has performed well despite the difficult business environment," the company said.
BMW said that total car sales would likely be between 10-15 percent lower than in 2008 provided there are no further economic setbacks. The company’s brands include its namesake BMW cars, the Mini compact and the super-luxury Rolls-Royce brands. The company also builds BMW motorcycles.
Despite the likely sales decline, BMW said it expected to report a positive result for the financial year 2009 and to maintain its leading position in the premium segment.
BMW said net income for the first nine months of the year fell 96 percent to â‚¬47 million from â‚¬1.3 billion in the January-September period of 2008 as the company saw a large pretax loss on its automobile business during the period.
Revenue for the first nine months declined 10 percent to â‚¬36.2 billion from â‚¬40.4 billion.
Automobile group production for the first nine months of the year was 21 percent lower at 907,429 compared to almost 1.2 million cars in the same period a year ago.
Motorcycle production was also 21 percent lower during the first nine months of 2009 at 65,909 from 83,845.
The company said it had also reduced its work force by 5.3 percent to 98,358 employees at September 30, compared with 103,850 employees at the end of September 2008.
Observers are looking forward to the group’s new models including a Mini coupe and a new Rolls Royce model called the Ghost, which should add to future revenue.
BMW has said the order book on the new super-luxury Ghost â€” which is a step below the top of the line Phantom â€” is developing well. It hopes to start selling that new car next year.