Expatica news

DaimlerChryslerearnings drop

19 February 2004

STUTTGART – German-American car concern DaimlerChrysler reported Thursday that its net income in 2003 fell by over 90 percent in 2003 amid lower sales and restructuring costs, with the Chrysler unit still in the red.

The company said net income, at EUR 448 million, was 91 percent down on the nearly EUR 4.72 billion result in 2002. Earnings per share, at EUR 0.44, was likewise 91 percent lower than the EUR 4.68 figure in 2002.

The net result came on operating profits of EUR 5.7 billion, down from the 2002 figure of EUR 6.9 billion.

In calling 2003 a year of weak demand in a weak global economy, DaimlerChrysler said group revenues fell 7 percent to EUR136.4 billion, reflecting both lower car sales and the appreciation of the euro against the US dollar.

The company said its car and commercial vehicles sales, at some 4.35 million, fell short of the 2002 figure of 4.54 million.

Despite the sharp drop in profit, the company management said it would propose an unchanged dividend of EUR 1.50 at the annual general meeting on 7 April in Berlin.

DaimlerChrysler was reserved about its outlook for 2004, a company statement saying only that the company was aiming to achieve a “slight increase” in operating profits.

Only in 2005 and 2006 would the company expect to see “significantly improved earnings” when new vehicles from the various divisions are launched on the market. DaimlerChrysler is to launch around 50 new products in the 2004-2006 period.

DaimlerChrysler said its major restructuring at Chrysler was still a drag on earnings, with the revamping costs there reaching EUR 469 million. Chrysler produced a net loss of EUR 40 million.

The US unit had been hoping to reach break-even last year, but its operations ended up losing EUR 506 million, compared with a black-ink result of EUR 609 million in 2002.

Some bright spots in the DaimlerChrysler business sheet were at the Mercedes and commercial vehicles operations. Mercedes operating profit rose 4 percent to almost EUR 3.13 billion, on a 3 percent rise in revenues, to EUR 51.44 billion.

Commercial vehicles produced an EUR 855 million operating profit, in a big turnaround from the 2002 losses of EUR 343 million, on steady revenues of EUR 28.5 billion.

The services division produced an operating profit of EUR 1.24 billion, down almost 60 percent from the 2002 figure of EUR 3.06 billion, one which was bloated by various divestments.

The major headache besides Chrysler continued to be the troubled Mitsubishi Motors unit in which DaimlerChrysler holds a 37 percent stake.

Subject: German news