BMW lifts outlook, warns inflation and supply issues not over

BMW lifted its annual outlook for its margin on earnings before interest and taxes (Ebit) in the automotive segment on Tuesday (Aug 1) but said it foresaw ongoing challenges from supply chain issues and inflation in the second half of the year.

The carmaker’s forecast mirrored that of competitors such as Mercedes-Benz which also raised their earnings outlook but warned the macroeconomic environment would continue to weigh on output.

BMW said it now expects an Ebit margin on its cars’ division of between 9 per cent-10.5 per cent from 8 per cent-10 per cent previously, and expects solid growth in its deliveries, up from a previous forecast of only slight growth, on the basis of a strong order bank and improved availability of its premium vehicles.

The preliminary results and outlook adjustment failed to impress markets, with shares down 3.97 per cent at 0830 GMT, underperforming Germany’s DAX and Europe’s autos index.

Full quarterly results will be published on Aug 3.

The carmaker reported preliminary figures of a 12.6 per cent group margin on earnings before taxes in the first half of the year and a 10.6 per cent Ebit margin in the automotive segment, helped by higher sales and pricing.

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BMW sales rose 4.7 per cent in the first half of the year compared with last year, when supply chain issues caused by factors including the war in Ukraine and lockdowns in China dented output. REUTERS