FRANKFURT: German luxury carmaker BMW posted a forecast-beating 7.5 percent rise in second-quarter profit as sales of motorcycles and demand for its new 5-series helped to offset slowing demand for luxury cars in the US.
Deliveries of BMW Mini and Rolls-Royce vehicles rose 4.6 percent to 633,582 cars in the second quarter.
BMW forecast a “solid” increase in automotive segment revenue for the full year, predicting “additional momentum” in sales in the second half as a new version of its 5 series is launched in markets such as China.
Analysts welcomed BMW’s outlook for car sales, and the fact that the Bavarian automaker remains the only German premium brand that is not being investigated for using illegal software to cheat emissions tests.
“We confirm our positive view on BMW especially as BMW seems to be less involved in the ongoing emission discussions,” DZ Bank analyst Michael Punzet said in a note on Thursday.
German prosecutors are investigating Daimler, Audi, Porsche and VW to see whether they used illegal software designed to cheat emissions tests.
BMW’s group earnings before interest and tax (EBIT) rose to €2.92 billion ($3.46 billion), compared with an average forecast for €2.82 billion in a Reuters poll of banks and brokerages.
BMW affirmed its guidance for a slight increase in full-year group pretax profit and an operating margin of 8 to 10 percent at its automotive business, which posted a second-quarter margin of 9.7 percent, up from 9.5 percent a year earlier.
Germany’s auto industry is still under fire almost two years after Volkswagen admitted to cheating pollution tests.
Politicians and auto executives in Germany on Wednesday agreed to update the engine management software in 5.3 million diesel vehicles in an attempt to cut pollution and avert outright bans of diesel cars from cities such as Stuttgart.
The cost of the software updates, which are designed to improve exhaust gas filtering systems and to retain confidence in diesel as a technology, will cost BMW a low to medium double-digit million euro amount, the company said on Thursday.
The compromise was agreed despite criticism from environmental groups who dismissed the updates as an inadequate solution for improving air quality, and amid demands from some politicians to impose more extensive mechanical modifications to diesel vehicles.
“The probability of hardware updates is very low and technically not feasible,” Chief Executive Harald Krueger told journalists on conference call. Older cars do not have space to fit bulky exhaust gas recirculation systems, BMW said.
The share of diesel engine cars at BMW has fallen to 35.4 percent of new deliveries worldwide, and 61 percent of sales in Germany, from a level of 37 percent and 65 percent in 2016. BMW has made adequate provisions for a possible decline in residual values of diesel cars, the company said, adding that currently BMW is not seeing any residual value declines.
BMW’s 5-series launch helps drive forecast-beating Q2 profit
BMW’s 5-series launch helps drive forecast-beating Q2 profit
Closing Bell: Saudi benchmark index edged up to close at 10,549
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 58.39 points, or 0.56 percent, to close at 10,549.08.
Total trading turnover reached SR1.59 billion ($425 million), with 218 stocks advancing and 37 declining.
The parallel market, Nomu, added 222.72 points, or 0.96 percent, to finish at 23,519.01, as 43 stocks rose and 21 retreated. Meanwhile, the MSCI Tadawul Index increased by 6.11 points, or 0.44 percent, to close at 1,393.42.
Leading the day’s gains was Alkhaleej Training and Education Co., whose shares jumped 7.63 percent to SR20.45. Other strong performers included Consolidated Grunenfelder Saady Holding Co., up 6.60 percent to SR9.69, and Abdullah Saad Mohammed Abo Moati for Bookstores Co., which rose 6.48 percent to SR48.98.
On the downside, Naseej International Trading Co. recorded the largest decline, falling 2.44 percent to SR34.44, while National Gas and Industrialization Co. dropped 1.79 percent to SR93.10 and Nama Chemicals Co. slipped 1.32 percent to SR23.99.
Saudi Aramco Base Oil Co., or Luberef announced the signing of a memorandum of understanding with Saudi Aramco for a GIII+ production facility in Jazan.
The 18-month agreement, which may be renewed, is a key step in the Group III+ Project aimed at enhancing production capacity. The MoU is non-binding, and any future approvals, formal agreements, or financial impacts will be disclosed in line with regulatory guidelines. Luberef ended the session at SR96.10, down 0.26 percent.
Meanwhile, the Power and Water Utility Co. for Jubail and Yanbu, or Marafiq, reported receiving official notice of higher energy product prices used in production. The company estimated the financial impact for 2026 at 5.6 percent of total cost of sales, based on its most recent audited 2024 statements.
The effect is expected to appear in the first quarter of the 2026 fiscal year. Marafiq said it is working to mitigate the impact through improved production efficiency, enhanced plant reliability, optimized asset utilization, and cost reductions. The stock closed at SR36.80, up 1.03 percent.
