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

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.


Thailand finance minister: economy to recover next year with 4% growth

Updated 23 November 2020

Thailand finance minister: economy to recover next year with 4% growth

  • Economy had bottomed but recovery was not fast as the battered tourism sector hurt supply chains
  • Budget for the next fiscal year will still focus on boosting domestic activity

BANGKOK: Thailand’s economy is expected to grow 4 percent in 2021 after a slump this year and fiscal policy will support a tourism-reliant economy struggling from the impacts of the coronavirus pandemic, the finance minister said on Monday.
Southeast Asia’s second-largest economy shrank a less than expected 6.4 percent in the third quarter from a year earlier after falling 12.1 percent in the previous three months.
The economy had bottomed but recovery was not fast as the battered tourism sector, which accounts for about 12 percent of gross domestic product (GDP), has also hurt supply chains, Finance minister Arkhom Termpittayapaisith said.
“Without the COVID, our economy could have expanded 3 percent this year, he said. “As we expect a 6 percent contraction this year, there is the output gap of 9 percent,” he told a business forum.
“Next year, we expect 4 percent growth, which is still not 100 percent yet,” Arkhom said, adding it could take until 2022 to return to pre-pandemic levels.
There is still fiscal policy room to help growth from this year’s fiscal budget and some from rehabilitation spending, he said.
The budget for the next fiscal year will still focus on boosting domestic activity, Arkhom said, and the current public debt of 49 percent of GDP was manageable.
Of the government’s 1 trillion baht ($33 billion) borrowing plan, 400 billion would be for economic revival, of which about 120 billion-130 billion has been approved, Arkhom said.
He wants the Bank of Thailand to take more action short term on the baht, which continued to rise on Monday, despite central bank measures announced on Friday to rein in the currency strength.
“They have done that and they have their measures... which should be introduced gradually and more intensely,” Arkhom said.