Daimler revs up 2017 forecasts after powerful Q1
FRANKFURT: German luxury car manufacturer Daimler AG raised its forecasts yesterday, predicting a significant rise in operating profit this year after a surge in sales of Mercedes-Benz luxury cars and sports utility vehicles, boosted by the launch of new models.
Daimler said it now expected significant growth in volume sales, revenue and group earnings before interest and tax (EBIT) this year after its first-quarter net profit doubled to €2.8 billion ($3.1 billion).
“We are very confident for the remainder of the year to achieve our financial as well as our strategic goals,” Daimler’s chief financial officer Bodo Uebber said in a statement.
In February Daimler had said it expected only slight growth in group EBIT, but record sales of Mercedes passenger cars in the first quarter helped the Stuttgart-based carmaker produce forecast-beating results.
Mercedes launched the new version of its E-Class saloon last year, with volume sales since gaining traction. In March alone sales of the new model rose by 65% and Daimler said yesterday it now expected a significant rise in sales of Mercedes-Benz Cars for the full year.
Daimler’s group EBIT jumped 87%
to €4.01 billion ($4.25 billion) in the first quarter, thanks in part to €690 million in one-off gains.
EBIT at Mercedes-Benz Cars rose 60% to €2.23 billion, delivering a return on sales of 9.8% after the division reported a 15% rise in first-quarter sales.
Daimler raised its forecast for its
financial services division, saying it now expects a slight increase in EBIT this year.
Daimler published key first-quarter earning figures earlier this month, revealing that profits were lifted by the revaluation of a stake in mapping company HERE, as well as by the sale of some real estate and the reversal of an impairment charge on its
stake in Chinese carmaker Beijing Automotive Industry Group Co Ltd.
A stricter interpretation of EU financial reporting guidelines has forced Daimler to start giving forecasts based on unadjusted numbers, increasing the scope for one-off gains and losses to distort consensus in the short term.
Daimler also reiterated yesterday that recent steps taken by the US authorities to investigate diesel emissions pollution and so-called auxiliary emission control devices could lead to significant penalties and vehicle recalls.
In view of the tough penalties imposed by the US authorities on rival German carmaker Volkswagen AG for conspiring to cheat on diesel-emission tests, and after US authorities issued a notice of violation against Fiat Chrysler, Daimler said it could face similar risks.
“It cannot be ruled out that the authorities might reach the conclusion that Mercedes-Benz diesel vehicles have similar functionalities,” Daimler said in its quarterly report.
The inquiries and investigations were continuing , Daimler said, and the outcome could not be predicted. “If these or other inquiries, investigations, legal actions and/ or proceedings result in unfavourable findings, an unfavourable outcome or otherwise develop unfavourably, the company could be subject to significant monetary penalties, remediation requirements, vehicle recalls, process improvements and mitigation measures.”