Listen to the audio version of the article
BMW reported significantly higher first-half revenues at 74 billion euros, thanks in part to the integration of its Chinese joint venture BMW Brilliance Automotive (BBA) and higher sales and prices. Earnings before interest and taxes (EBIT) were €9.7 billion, up 42.6%, but net income fell to €6.6 billion, also due to the impact of the integration of Bba. This year’s decline in profit was primarily due to a higher tax rate than in previous years due to consolidation, the company said.
“Our strong growth comes from the significant increase in our sales of all-electric vehicles,” said Oliver Zipse, group CEO. Electric vehicles sold by the group more than doubled in the first six months of the year (+133.1%) and now account for 12.5% of deliveries. BMW is ramping up investment in electrification faster than expected, but has no plans yet to set an end-of-production date for internal combustion engine cars, not least because sales are still strong in key growth markets, such as China and the US . The automaker is close to hitting its goal of 15% electric vehicle sales this year, beating out Mercedes-Benz and Porsche, for which battery-powered cars have so far accounted for about 11% of sales.
The results have allowed the Munich-based company to raise its annual forecast, based on a solid order book and improved supply chain conditions. The group now expects a “solid growth” in deliveries, against a “weak growth” previously expected, and on an operating margin between “9% and 10.5%” instead of “8% and 10%”. The forecast is for growth on the European market, strong sales in the United States and more moderate growth in China.
However, the Munich manufacturer now expects a cash flow “of at least 6 billion euros”, against 7 billion before, due in particular to an “increase in raw material costs”.
“Supplier-related charges, due to inflation and supply chain cost overruns, continue to have a negative effect in the second half of the year.”