Mercedes boss Ola Källenius
Strong demand and higher prices helped Mercedes-Benz to jump in profits in the third quarter. From July to September, the group earned 5.2 billion euros before interest and taxes – that was 83 percent more than in the same period last year, when the chip shortage slowed deliveries, as the carmaker announced on Wednesday.
The profit thus exceeded expectations on the financial market. The net result doubled to four billion euros. The Dax group explained that robust demand and the implementation of higher prices were decisive for the “solid” economic result. “In combination with the ongoing cost discipline, we are making the company more resilient and thus also setting the pace for the coming months,” said CFO Harald Wilhelm.
Sales increased by 19 percent to 37.7 billion euros and thus met the forecasts of analysts. The brand with the star increased car deliveries by more than a third to around 530,000 vehicles in the summer. Above all, the China business, which no longer suffered so badly from corona lockdowns, boosted the sales figures.
At 14.5 percent, the adjusted margin in the main business area of passenger cars was at the high level of the first half of the year, and the operating result doubled. A year ago it was only 8.2 percent, which corresponded to the long-term average at Mercedes-Benz.
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The brand with the star continues to benefit from a special situation: since there is a lack of supply due to the chip crisis, the Swabians can achieve higher prices and are concentrating on orders, above all, on expensive, highly profitable top models such as the S-Class. Mercedes boss Ola Källenius also trims the brand for luxury and focuses on class instead of mass. Orders continued to exceed supply, the automaker said.
Earnings forecast increased
Because of the energy crisis and restrictions caused by the corona pandemic in China, the company remains vigilant, secures its supply chains and reduces the use of natural gas in production, explained Mercedes. The very high inflationary pressure, associated interest rate hikes by the central banks and ongoing bottlenecks in the global supply chains made the outlook difficult.
The Dax group nevertheless raised the annual profit forecast: The return on sales for cars and vans should now be one percentage point higher at 13 to 15 percent and nine to eleven percent, respectively. The operating profit will be significantly and no longer just slightly above the previous year’s mark of 16 billion euros – that is, by more than 15 percent.
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