Roundup: Latest financial figures

25 July 2019

Roundup: Latest financial figures

25 July 2019

Carmakers are starting to release their latest financial results, with many reporting tough trading conditions.

Daimler

German carmaker Daimler recently announced that it was reducing its profit outlook, and following the release of its Q2 results, the impact that certain conditions have had are now clear.

The company will intensify cost cuts and is planning to review and reduce its model line-up after legal issues for diesel-related situations, and the cost of replacing Takata airbags triggered a €1.6 billion loss before interest and taxes.

‘We are intensifying the group-wide performance programs and reviewing our product portfolio to safeguard future success,’ CEO Ola Källenius said in a statement.

The Group’s total unit sales declined by 1% to 822,000 passenger cars and commercial vehicles in Q2. Annual revenue will be slightly higher than a year ago, while vehicle sales will be about the same as 2018 thanks to increased product momentum in the second half, the company believes.

Volkswagen

VW’s financial figures were affected by issues the company faced in 2018, resulting in a rise in operating profit.

The carmaker’s Q2 figures saw a 30% increase in operating profit in the first six months of the year, and a 10% rise in the second quarter, despite lower vehicle sales. The Group was helped by registrations of higher-margin SUVs and rising volumes at Porsche and Skoda.

Operating profit rose to €10 billion in the second quarter, the automaker said in a statement. Vehicle sales fell 1.8%, but group sales rose to €125 billion, up 4.5%

The jump was magnified by the absence of a diesel charge that VW booked in the year-earlier period.

Ford

With the US carmaker starting a major turnaround plan in Europe, Ford’s net income plummeted 86% to $148 million (€133 million) once special charges of this programme were taken into account, according to its financial figures.

Excluding the one-time items, Ford’s earnings before interest and taxes fell just 2% from a year earlier, to $1.65 billion (€1.5 billion). Global restructuring actions in Europe and South America, including plant closures and job cuts, accounted for virtually all of the $1.2 billion (€1.08 billion) in special charges during the quarter.

‘The underlying performance trends are strong,’ said CFO Tim Stone. ‘The fundamental redesign efforts are progressing and showing benefits.’

The carmaker last month said it would cut 12,000 jobs in Europe by the end of 2020 and reduce its manufacturing footprint from 24 plants to 18.  

PSA Group

PSA Group delivered a big increase in its first-half profits as new models and the further integration of Opel made up for weaker vehicle sales.

Recurring operating income at the automaker rose 11% to €3.3 million, lifting its operating margin to a new record of 8.7% in the first half, PSA said in a statement.

Group revenue amounted to €38,340 million in the first half of 2019, down by 0.7% compared to 2018 H1.

‘Our results are proving the sustainability of our performance despite the weakness of global markets,’ CFO Philippe de Rovira told reporters. ‘These headwinds were more than compensated by our efficiency and continuous efforts to save costs.’

‘Thanks to our focus on our strategic plan execution, we have delivered strong Free Cash Flow and Recurring Operating Margin in H1,’ added PSA chairman Carlos Tavares.

‘We are ready for electrification and to embrace the next technological challenges. Our agility and aligned management team remain key assets to reach the targets of the Push to Pass plan.’