BMW warning over inflation and supply chain issues pressure sends shares down
BMW lifted its annual outlook for its margin on earnings before interest and taxes in its automotive segment on Tuesday, but warnings of the impacts of supply chain challenges and inflation prompted a sell off from investors.
The carmaker’s forecast mirrored that of competitors such as Mercedes-Benz which also raised their earnings outlook but warned the macroeconomic environment would continue to weigh on output.
BMW said it now expects an EBIT margin on its cars division of between 9 per cent -10.5 per cent from 8-10 per cent previously, and expects solid growth in its deliveries, up from a previous forecast of only slight growth, on the basis of a strong order bank and improved availability of its premium vehicles.
The results and outlook adjustment failed to impress markets, with shares down nearly 7 per cent at midday, underperforming Germany’s DAX and Europe’s autos index.
The carmaker reported preliminary figures of a 12.6 per cent group margin on earnings before taxes in the first half of the year and a 10.6 per cent EBIT margin in the automotive segment, helped by higher sales and pricing.
BMW sales also rose 4.7 per cent compared to last year, when supply chain issues caused by factors including the war in Ukraine and lockdowns in China dented output, with its electric vehicle segment performing particularly well.
Full quarterly results will be published on Aug 3.
Reuters – Victoria Waldersee