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BMW Stock Up On Strong FY21 Profit View; Despite Weak FY20 Results

bmw march17 lt

Shares of BMW AG were gaining around 5 percent in German trading after the automotive giant on Wednesday said it sees significantly higher profit before tax in its fiscal 2021 following recovery in market, despite reporting weak results in its fiscal 2020.

Further, the company expects to have one million vehicles powered by either all-electric or plug-in hybrid drivetrains on the road by the end of 2021. The sale of electrified vehicles is expected to double in 2021 compared to that of 2019.

BMW said it intends to have 25 electrified models on the road by 2023. By 2025, the proportion of electrified cars in total Group deliveries is expected to rise to at least 25 percent.

In the new year, BMW expects business to develop positively and the risk situation to remain stable despite the volatile situation due to the global spread of coronavirus. New automobile and motorcycle models as well as individual mobility-related services are expected to generate momentum.

The Automotive segment would record a solid year-on-year increase in the number of BMW, MINI and Rolls-Royce brand vehicles delivered to customers. The segment's EBIT margin is set to recover in 2021, most likely finishing within a range of 6 to 8 percent.

The Motorcycles segment projects significant growth in deliveries and EBIT margin would be within the target range of 8 to 10 percent.

For 2021, BMW expects a dividend payout ratio within a range of between 30 percent and 40 percent, compared to last year's 32.5 percent.

For fiscal 2020, Group net profit declined 23.2 percent to 3.86 billion euros from last year's 5.02 billion euros. Earnings per share fell 23.2 percent to 5.75 euros from 7.49 euros last year.

Profit before tax fell 26.6 percent to 5.22 billion euros from 7.12 billion euros a year ago.

Revenues dropped 5 percent to 99 billion euros from 104.21 billion euros a year ago.

Automotive deliveries declined 8.4 percent to 2.33 million vehicles. Motorcycles deliveries were down 3.4 percent to 169,272 vehicles.

In Germany, BMW shares were trading at 84.67 euros, up 5.18 percent.

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