BMW profits crash 76 per cent as it gears up for €1.4bn EU antitrust fine
German car manufacturer BMW has posted a steep fall in first-quarter profits after it put aside €1.4bn (£1.2bn) for a possible EU antitrust fine.
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The figures
Group revenues slipped a marginal 0.9 per cent to €22.5bn in the first quarter.
Pre-tax profit plunged 76 per cent to €762m.
Vehicle deliveries ticked up 0.1 per cent to 605,333 units.
Why it’s interesting
BMW’s first-quarter results were overshadowed by a hefty €1.4bn provision to pay a potential fine from EU competition regulators.
The German firm last month warned its profits would be impacted after the European Commission issued an initial verdict concluding BMW had colluded with Volkswagen and Daimler to block new emissions technology.
Despite the provision, BMW today said it will contest the allegations with “all the legal means at its disposal”.
The potential fine comes amid growing expenditure for the car manufacturer, which has unveiled a €12bn cost-cutting plan to counteract rising technology investment. BMW’s first-quarter research and development costs totalled €1.4bn, up 8.4 per cent on the previous year.
However, the firm continues to boost its market share, and posted a record number of vehicle deliveries for the first quarter.
BMW said its target margin range for the year will be between 4.5 per cent and 6.5 per cent, down from the original six to eight per cent range originally forecast. Full-year profit before tax is also expected to be “well below” last year as a result of the fine.
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What BMW said
BMW chairman Harald Krueger said: “In operational terms, we remain firmly on course and expect business to benefit from tailwinds, especially in the second half of the year, as numerous new models become available.
“At the same time, we are experiencing the impact of high levels of expenditure in numerous areas affecting the entire automotive sector. In addition, it has also been necessary to recognise a provision relating to ongoing proceedings of the EU Commission.”