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BMW Stock Dips On Weak FY18 Profit, Cautious FY19 Pre-tax Profit View


Shares of BMW Group (BMW.L) declined around 5 percent in German trading after the auto giant reported Wednesday weak profit in its fiscal year 2018, despite a slight growth in Automotive revenues with higher deliveries. Looking ahead for fiscal 2019, the company expects Group profit before tax will be well below the previous year's level.

Regarding the outlook, the company noted that some positive valuation effects recorded in 2018 will not be repeated in 2019.

BMW Group said it is confident of its ability to achieve volume growth in the Automotive segment, where it is targeting a slight increase in the number of deliveries to customers in 2019.

Within a stable business environment, BMW Group expects an EBIT margin in the range of 8 to 10 percent. However, its ability to influence underlying conditions is limited. Based on the prevailing conditions, an EBIT margin of 6 to 8 percent is forecast for the Automotive segment in 2019.

In fiscal 2018, Group net profit amounted to 7.21 billion euros, down 16.9 percent from last year's 8.68 billion euros. In the previous year, net profit was exceptionally high due to valuation effects of around 1 billion euros arising in connection with the US tax reform.

Earnings per share were 10.82 euros, down 17.2 percent from 13.07 euros a year ago. At 9.82 billion euros, Group profit before tax in 2018 was down 8.1 percent. EBT margin was 10.1 percent, down from 10.9 percent a year ago, but exceeded the target value of ten percent.

Group revenues were 97.48 billion euros, down 0.8 percent from last year's 98.28 billion euros. Adjusted for currency factors, revenues increased by 1.2 percent.

Automotive segment revenues edged up 0.1 percent to 85.85 billion euros, while Motorcycles segment revenue fell 4.4 percent to 2.17 billion euros.

Deliveries of the BMW Group's three premium automotive brands, BMW, MINI and Rolls-Royce, grew 1.1 percent to 2.49 million units in 2018 from 2.46 million units last year. A total of 2.13 million BMW brand vehicles were delivered worldwide, up 1.8 percent. Worldwide deliveries of MINI brand vehicles fell 2.8 percent to 361,531 units. Rolls-Royce Motor Cars' delivery was 4,107 units, up 22.2 percent.

Further, the company said its Board of Management and the Supervisory Board will propose payment of a dividend of 3.50 euros per share of common stock and 3.52 euros per share of preferred stock at the Annual General Meeting on May 16.

In Germany, BMW shares were trading at 72.22 euros, down 4.62 percent.

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