BMW suffers first quarterly loss since 2009
German carmaker posts €498m pre-tax loss
BMW Group posted its first quarterly loss in eleven years on Wednesday, unable to avoid the economic devastation wrought by the Covid-19 crisis.
The vehicle manufacturer reported a pre-tax loss of €498m and an operating loss of €666m for the three months to the end of June. In the same period last year, the company had made a €2.2bn profit.
While BMW’s earnings before interest and taxes (EBIT) stood at 6.5 per cent in the second quarter of 2019, in Q2 2020 this metric plunged to a historic low of -10.4 per cent.
The firm has also revealed that it sold 25 per cent fewer cars in the period than in 2019. Mini and Rolls-Royce were among the worst-affected brands, with sales falling by 38 and 47 per cent respectively.
BMW is the last leading German carmaker to report its earnings for the historically unique quarter. Its nearly half-a-billion euro loss paled in comparison to Volkswagen’s losses of 2.4bn.
Like Daimler, BMW has announced its intention to cut thousands of jobs. In total around 6,000 full-time workers are expected to lose their positions, with a further 10,000 temporary and contract jobs also being cut.
CEO Oliver Zipse stated: "We are now looking ahead to the second six-month period with cautious optimism and continue to target an EBIT margin between 0 per cent and 3 per cent for the automotive segment in 2020.”
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Signs of the recovery were already evident in BMW’s report, with a 17 per cent increase in deliveries to China.
The cost of developing low-emission vehicles also contributed to the manufacturer’s significant quarterly loss. While in the short term this may weigh on BMW, in the long term the company will hope it pays dividends and helps to put the 2015 "Dieselgate" scandal behind it.
By mid-afternoon trading, BMW traded down 4.6 per cent at €55.46, 24 per cent below its 2020 starting point.
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