261
BMW (BMWG.DE) posted a rise in first-quarter profit on Thursday, boosted by a reevaluation of the German car maker’s stake in its Chinese joint venture and strong pricing, and maintained its 2022 outlook despite volatile prices for commodities and energy.
BMW said the reevaluation of its stake in its joint venture with Brilliance Auto Group had resulted in a preliminary profit of 7.7 billion euros ($8.2 billion).
In February, BMW said it would pay 3.7 billion euros to raise its stake in the joint venture to 75 per cent from 50 per cent after securing the necessary licence from Beijing.
In a client note, Jefferies analyst Philippe Houchois wrote that the stake had complicated BMW’s results, “but these numbers look like a significant beat”.
Stripping out the impact of the stake, BMW posted a 16.3 per cent increase in revenue for the quarter despite a 6.2 per cent drop in car sales as higher pricing helped.
“The strength and resilience of the BMW Group are particularly evident in this challenging environment,” CEO Oliver Zipse said in a statement.
The auto industry has been hit by a series of pandemic-related supply chain problems, in particular a global shortage of semiconductor chips.
Carmakers including BMW have focused on production of higher-margin vehicles, and a lack of supply has boosted prices for new and used cars alike.
BMW said that higher prices had also boosted income from the sale of vehicles coming off lease, in particularly in the US and British markets.
Strong pricing for its vehicles also helped to partly offset rising raw material and energy prices.
“The situation on commodities markets is expected to remain tense,” the company said. “Energy prices are also likely to remain at a high level.”
Despite the volatility, the carmaker said that the operating margin for its automotive segment should still fall within a range from 7 per cent to 9 per cent.
The company reported a net profit of 10.2 billion euros versus 2.8 billion euros a year earlier. Excluding the impact of the stake in its Chinese joint venture, BMW made an operating profit of 3.4 billion euros, up from 3 billion.
REUTERS