BMW races into 2018 with record first-quarter sales and profit

Net profit at the Munich-based group added 1.2 percent year-on-year to reach €2.3 billion. Above, visitors look at a BMW 330 Li on display at the Beijing auto show on April 25. (AFP)
Updated 04 May 2018

BMW races into 2018 with record first-quarter sales and profit

FRANKFURT AM MAIN: German high-end carmaker BMW said Friday it booked a strong first three months with record first-quarter shipments and profits, confirming its targets for the full year.
Net profit at the Munich-based group added 1.2 percent year-on-year to reach €2.3 billion.
But operating, or underlying profits fell 3.1 percent to €2.8 billion, on the back of revenues down 5.1 percent at €22.7 billion.
BMW said its turnover and operating profit were both braked by currency effects, arguing sales would otherwise have remained around the same level as last year.
Away from the figures, chief executive Harald Krueger highlighted “crucial strategic decisions” the firm had taken in the first quarter to lay the foundations for more connected, electric-powered future cars.
It has agreed with Mercedes-Benz maker Daimler, its historic rival, to merge the two firms’ apps for car-sharing, ride-hailing and locating parking spaces and electric car charging points, and opened an autonomous driving research center outside Munich.
Meanwhile BMW struck a deal with local firm Great Wall to build all-electric Mini cars in China and previewed a battery-powered version of its X3 SUV.
Unit sales added 3.0 percent worldwide, at 604,629 vehicles between flagship BMW, compact Mini and luxury Rolls-Royce.
The figures offered little sign that revelations early in the year that the group had cooperated with Daimler and Volkswagen to fund tests of diesel exhaust gases on live monkeys put off buyers, with sales adding 1.0 percent in Europe, 4.0 percent in the Americas and 6.3 percent in China.
Looking ahead to the full year, BMW expects to book new records for unit sales and revenue, with pre-tax profits of “at least the previous financial year’s level” of €10.7 billion.


Analysts urge Canada to focus on boosting the economy

Updated 06 July 2020

Analysts urge Canada to focus on boosting the economy

  • Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time

TORONTO: Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian Finance Minister Bill Morneau will deliver a “fiscal snapshot” on Wednesday that will outline the current balance sheet and may give an idea of the money the government is setting aside for the future.

As the economy recovers, some fiscal support measures, which are expected to boost the budget deficit sharply, could be wound down and replaced by incentives meant to get people back to work and measures to boost economic growth, economists said.

“The only solution to these large deficits is growth, so we need a transition to a pro-growth agenda,” said Craig Wright, chief economist at Royal Bank of Canada. The IMF expects Canada’s economy to contract by 8.4 percent this year. Ottawa is already rolling out more than C$150 billion in direct economic aid, including payments to workers impacted by COVID-19.

Further stimulus measures could include a green growth strategy, as well as spending on infrastructure, including smart infrastructure, economists said. Smart infrastructure makes use of digital technology.

“We have to make sure that government spending is calibrated to the economy of the future rather than the economy of the past,” Wright said.

Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time, citing the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by COVID-19 shutdowns.

Standard & Poor’s, Moody’s and DBRS still give Canadian debt the highest rating. At DBRS, Michael Heydt, the lead sovereign analyst on Canada, says his concern is about potential structural damage to the economy if the slowdown lingers too long.

Fiscal policymakers “need to be confident that there is a recovery underway before they start talking about (debt) consolidation,” Heydt said.

Fitch expects Canada’s total government debt will rise to 115.1 percent of GDP in 2020 from 88.3 percent in 2019.

Royce Mendes, a senior economist at CIBC Capital Markets, said the economy still needs more support.

“Turning too quickly toward austerity would be a clear mistake,” he said.