Daimler sees currency effects tempering Mercedes revenue growth

The profitability of its luxury cars division was dented by higher expenses for revaluing the leasing portfolio in Germany, Daimler said. (Reuters)
Updated 27 April 2018
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Daimler sees currency effects tempering Mercedes revenue growth

FRANKFURT: Daimler said currency headwinds will dampen revenue growth at its Mercedes-Benz luxury vehicles division this year, after foreign exchange effects and the absence of one-off gains pushed the group’s first-quarter operating profit 12 percent lower.
Daimler’s Chief Financial Officer Bodo Uebber said the company now expected a burden on earnings this year in excess of 1 billion euros tied to currency effects and the strong euro.
Group earnings before interest and taxes (EBIT) dropped to €3.34 billion in the three months through March, below analyst expectations.
Results in the year-earlier quarter were boosted by the reversal of an impairment of Daimler’s equity investment in BAIC Motor Corp. and the valuation of a stake in map maker HERE.
The return on sales at its Mercedes-Benz Cars division inched up to 9 percent in the first quarter, from 8.9 percent a year earlier, thanks to a 5 percent rise in car sales to 594,299 vehicles, the company’s best ever quarter for luxury sales.
The profitability of its luxury cars division was dented by higher expenses for revaluing the leasing portfolio in Germany, Daimler said.
Although Mercedes-Benz expects to continue posting new sales records, revenue growth will be impacted going forward, the Stuttgart-based carmaker said.
“At Mercedes-Benz Cars, the expected exchange rate developments and lifecycle effects will dampen the development of revenue, so the division is expected to post full-year revenue at the high level of 2017,” Daimler said.


UK core pay growth strongest in nearly 11 years, but jobs growth slows

Data showed the unemployment rate remained at 3.8 percent as expected. (Shutterstock)
Updated 16 July 2019
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UK core pay growth strongest in nearly 11 years, but jobs growth slows

  • Core earnings have increased by 3.6 percent annually, beating the median forecast of 3.5 percent
  • The unemployment rate fell by 51,000 to just under 1.3 million

LONDON: British wages, excluding bonuses, rose at their fastest pace in more than a decade in the three months to May, official data showed, but there were some signs that the labor market might be weakening. Core earnings rose by an annual 3.6 percent, beating the median forecast of 3.5 percent in a Reuters poll of economists. Including bonuses, pay growth also picked up to 3.4 percent from 3.2 percent, stronger than the 3.1 percent forecast in the poll. Britain’s labor market has been a silver lining for the economy since the Brexit vote in June 2016, something many economists attribute to employers preferring to hire workers that they can later lay off over making longer-term commitments to investment. The pick-up in pay has been noted by the Bank of England which says it might need to raise interest rates in response, assuming Britain can avoid a no-deal Brexit. Tuesday’s data showed the unemployment rate remained at 3.8 percent as expected, its joint-lowest since the three months to January 1975. The number of people out of work fell by 51,000 to just under 1.3 million. But the growth in employment slowed to 28,000, the weakest increase since the three months to August last year and vacancies fell to their lowest level in more than a year. Some recent surveys of companies have suggested employers are turning more cautious about hiring as Britain approaches its new Brexit deadline of Oct. 31. Both the contenders to be prime minister say they would leave the EU without a transition deal if necessary. A survey published last week showed that companies were more worried about Brexit than at any time since the decision to leave the European Union and they planned to reduce investment and hiring. “The labor market continues to be strong,” ONS statistician Matt Hughes said. “Regular pay is growing at its fastest rate for nearly 11 years in cash terms and its quickest for over three years after taking account of inflation.” The BoE said in May it expected wage growth of 3 percent at the end of this year.