Home » World » Car maker Daimler multiplies profit

Car maker Daimler multiplies profit

A production line at Daimler in Sindelfingen (Baden-Württemberg). (Symbol image)


Keystone

A flourishing business in China and cost reductions drove the Stuttgart automaker Daimler’s profit in the first quarter to unimagined heights.

Operating earnings before interest and taxes (EBIT) rose to 5.75 (2020: 0.62) billion euros, as Daimler announced on Friday night. That was more than nine times the first quarter of 2020, which was marked by the outbreak of the corona pandemic.

Analysts had expected the group to be just under five billion euros in EBIT for the first three months of the year. “We are continuing to implement our strategy consistently in a very positive market environment,” said CEO Ola Källenius. “At the same time, it becomes clearer how hard we are working to lower the company’s breakeven point.” The strong demand had a positive effect on the prices that Daimler was able to enforce with customers. The product mix has changed towards more lucrative models.

Daimler reported a 22 percent increase in car sales in the first quarter, and sales soared by 60 percent in China alone. Nevertheless, the automaker surprised the experts, especially in the business with cars and vans. In the largest segment, Daimler alone earned 4.1 billion euros before interest and taxes, eight times as much as a year earlier and a good half billion euros more than the analysts expected on average. The division’s adjusted return on sales reached 14.3 percent. This results in sales of 26.9 billion euros, 16 percent more than in the first quarter of 2020.

Even in the truck and bus business, significantly more remained than a year ago, despite a slight decline in sales. The EBIT quadrupled to 1.04 (0.25) billion euros and thus met the analysts’ forecasts. Sales were around 8.6 (8.7) billion euros. Källenius wants to split off the truck division and put it on the stock exchange separately. The Mobility service division contributed 744 (58) million euros to the result, a little more than expected.

At the general assembly at the end of March, CEO Källenius confirmed the forecast for the full year: sales, sales and operating profit (EBIT) should be significantly higher in 2021 than the previous year. After a quarter of the year, Daimler is still short of around 850 million euros in EBIT, to exceed the 6.6 billion euros from the previous year.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.