BMW earnings hit by strong Euro

The luxury carmaker BMW AG has witnessed a slight decline in its revenue and profits as a consequence of appreciation in the value of the euro, quarterly earnings figures published on Friday by the company show.

While the number of global sales grew in the first quarter (Q1) of 2018, adverse currency effects still caused gross revenue to fall by 5 percent to 22.7 billion euros (27.2 billion U.S. dollars) compared to the same period last year. At the same time, earnings before interest and taxes (EBIT) declined by 0.5 percent to 3.2 billion euros.

Nevertheless, BMW chief executive officer (CEO) Harald Krueger reaffirmed an earlier earnings target of maintaining EBIT levels "at least of the level of the past year" throughout 2018.

The Munich-based company posted its best-ever earnings figures in 2017, achieving gross revenue 86 billion euros and selling 2.46 million cars. Krueger predicted that EBIT could even rise above the level of the record year if antitrust authorities approved the recently announced merger of BMW's and Daimler's carsharing platforms "DriveNow" and "Car2Go".

The CEO further emphasized on Friday that BMW's net profits rose by 1 percent to 2.3 billion euros in Q1 in spite of currency headwinds. The EBIT profit margin hereby rose from 9.4 percent to 9.7 percent for its core business with passenger vehicles, placing the company ahead of German rivals Mercedes-Benz (9 percent) and Audi (8.5 percent).

"We want to achieve slight gains to reach new record levels for 2018 sales and revenue in the automobile segment," a statement by Krueger read. He reiterated an earlier forecast for 2018 of achieving an average EBIT margin between 8 and 10 percent in the division.

The CEO argued that BMW was in a good position to react to wider changes in the global automotive industry thanks to its performance in 2017. "We recorded record levels for revenue and profits at the start of the year and implemented important strategic decisions," Krueger said.

Amongst others, BMW had recently taken first steps towards the establishment of a new joint-venture with Chinese manufacturer Great Wall for the local production of all-electric MINI (a brand owned by BMW). The move reflected a clear commitment to the electrified future of the MINI brand and underscored the growing importance of the Chinese market for BMW.

BMW also highlighted that it had opened a brand-new campus for autonomous driving near Munich in April. The state-of-the-art site will be used in collaboration with partners to develop technologies for highly and fully-automated driving.