BMW predicted a decline in deliveries for the entire year but maintained its projection of 7-9 percent for the automotive margin. The company also warned of hurdles in the second half, including inflation and gas scarcity concerns as well as persistent supply chain bottlenecks.
Higher pricing and strong demand on the used car market should partially offset the effects of lower output, the premium carmaker said.
The Munich-based carmaker reported a 31% drop in second-quarter earnings before interest and taxes to 3.4 billion euros ($3.46 billion) despite growing revenues, still beating a 3.13 billion euro forecast in a Refinitiv poll of eight analysts , according to the South Korean News Agency (Yonhap).
The consolidation of its China joint venture BMW Brilliance Automotive pushed up revenues in the first half but dampened second-quarter earnings, BMW said, reporting an automotive margin of 8.2%, down from last year’s 15.8%.
The premium carmaker, which last year delivered more cars than ever at 2.52 million, had previously expected to match that output this year but now expects a slight fall, it said, with deliveries down nearly a fifth in the second quarter.
Group earnings before taxes in the quarter were down 34.3% because of last year’s one-time gain of 1 billion euros ($1.02 billion) from a partial reversal of EU trust fines, and 1.1 billion in headwinds from the Chinese unit’s consolidation, it said.
Overall, the first half earnings before tax increased by 7.7 billion euros due to the revaluation of the Chinese joint venture shares.
BMW increased its stake in its joint venture with Brilliance Auto Group to 75% from 50% in February after securing the necessary license from Beijing to take majority control.
It said at the time the deal would have a positive effect of 7-8 billion euros on the financial results of the automotive business.
