BMW quarterly profit dips in ‘volatile’ times

BMW’s third-quarter revenues were supported by brisk demand for the group’s vehicles which include the compact Mini and luxury Rolls-Royce. (AFP)
Updated 07 November 2018
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BMW quarterly profit dips in ‘volatile’ times

  • Third-quarter revenues were up 4.7 percent to €24.7 billion
  • The group had already issued a rare profit warning in September

FRANKFURT: German high-end carmaker BMW on Wednesday posted a steep drop in quarterly profit as new EU emissions tests, global trade tensions and costly recalls weighed on the bottom line.
The Munich-based group said net profit between July and September slumped 24 percent year-on-year to €1.4 billion ($1.6 billion), falling short of analyst expectations.
Third-quarter revenues were up 4.7 percent to €24.7 billion, supported by brisk demand for the group’s vehicles which include the compact Mini and luxury Rolls-Royce.
The group had already issued a rare profit warning in September when it was forced to lower its full-year outlook in the face of a series of setbacks.
Chief among them was the introduction of tough new EU pollution tests known as WLTP, which sent rival carmakers scrambling to shift non-compliant models before the September 1 deadline.
This resulted in “unexpectedly intense competition,” BMW said.
The group has also been unnerved by US President Donald Trump’s festering trade row with China and his threats to slap steep tariffs on auto imports from the European Union.
“The ongoing international trade conflicts had the effect of aggravating the market situation and feeding consumer uncertainty,” said BMW, which owns factories in Europe, the US and China.
The automaker also felt the pinch from a mass recall of diesel-powered cars over a fire risk in the third quarter, and increased spending on electric and self-driving cars.
“Particularly in these volatile times, we are maintaining our focus on the future and taking the decisions that will lead to tomorrow’s success,” said chief executive Harald Krueger.
BMW confirmed its trimmed outlook for 2018, forecasting revenues from its car business “slightly lower” than last year, rather than the slight increase previously expected.
Group-wide profit before tax “is expected to show a moderate decrease” year-on-year, rather than staying around last year’s level of €10.7 billion.


US intelligence says Huawei funded by Chinese state security: report

Updated 20 April 2019
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US intelligence says Huawei funded by Chinese state security: report

  • The accusation comes at a time of trade tensions between Washington and Beijing
  • Huawei dismissed the allegations

US intelligence has accused Huawei Technologies of being funded by Chinese state security, The Times said on Saturday, adding to the list of allegations faced by the Chinese technology company in the West.
The CIA accused Huawei of receiving funding from China’s National Security Commission, the People’s Liberation Army and a third branch of the Chinese state intelligence network, the British newspaper reported, citing a source.
Earlier this year, US intelligence shared its claims with other members of the Five Eyes intelligence-sharing group, which includes Britain, Australia, Canada and New Zealand, according to the report.
Huawei dismissed the allegations in a statement cited by the newspaper.
“Huawei does not comment on unsubstantiated allegations backed up by zero evidence from anonymous sources,” a Huawei representative told The Times.
The company, the CIA and Chinese state security agencies did not respond immediately to requests for comment.
The accusation comes at a time of trade tensions between Washington and Beijing and amid concerns in the United States that Huawei’s equipment could be used for espionage. The company has said the concerns are unfounded.
Authorities in the United States are probing Huawei for alleged sanctions violations.
Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, Ren Zhengfei, was arrested in Canada in December at the request of the United States on charges of bank and wire fraud in violation of US sanctions against Iran.
She denies wrongdoing and her father has previously said the arrest was “politically motivated.”
Amid such charges, top educational institutions in the West have recently severed ties with Huawei to avoid losing federal funding.
Another Chinese technology company, ZTE Corp. , has also been at the center of similar controversies in the United States.
US sanctions forced ZTE to stop most business between April and July last year after Commerce Department officials said it broke a pact and was caught illegally shipping US-origin goods to Iran and North Korea. The sanctions were lifted after ZTE paid $1.4 billion in penalties.
Reuters reported earlier this week that the United States will push its allies at a meeting in Prague next month to adopt shared security and policy measures that will make it more difficult for Huawei to dominate 5G telecommunications networks.