Finance

Finance

BMW posts profit dwindled by 90%

12 March 2009 16:13 (UTC +04:00)

Bakuâ€“ APA-Economics. BMWâ€™s net profits dwindled nearly 90% to â‚¬330 million ($423 million) last year, as the global economy weakened and reduced demand for cars.
Bayerische Motor Werke AG, the biggest luxury carmaker, reported the sharper-than-expected drop in annual profit after it spent money cutting jobs and booked charges for bad debts and slowing sales of second-hand autos.
Analysts polled by Bloomberg had estimated profit at 1.02 billion euros.
Earnings were hit by 2.4 billion euros of exceptional costs linked to bad debts, personnel costs and provisions to cover risks on used car markets, BBC reported.
BMW also took provisions throughout 2008 for bad debt and declining values of vehicles returned on lease, incurring charges of 931 million euros for the fourth quarter alone.
The company said today it plans a dividend of 30 cents a share for the full year, down 71 percent from 2007.
BMWâ€™s operating cash flow fell 28 percent to 4.47 billion euros and its cash holdings increased 86 percent to 8.11 billion euros. Sanfordâ€™s Warburton said that was encouraging and unusual for the car industry last year.