Daimler Group reports net profit of Euro 1,825 million for Q2 CY2018, down 27.35%

German auto major, Daimler Group today announced its Q2 CY2018 results, posting a revenue of Euro 40.8 billion (Rs 311,875 crore), down 0.97 percent compared to same period last year. For the same period the company sold a total of 833,000 PVs and CVs globally, an increase of 1 percent YoY.

The Daimler Group achieved second-quarter EBIT of Euro 2,640 million (Rs 20,180 crore) in 2018, which was significantly below its prior-year earnings of Euro 3,747 million (Rs 28,642 crore), the net profit was Euro 1,825 million (Rs 13,950 crore), down 27.35 percent compared to same period last year.

The company attributed the results on the back of the Mercedes-Benz Cars division being not able to achieve its earnings of the prior-year quarter due to a temporarily weaker pricing including tariffs. The Daimler Trucks’ earnings was at the level of the prior-year quarter. The Mercedes-Benz Vans and Daimler Buses divisions posted significantly lower earnings than in the prior-year quarter. At Daimler Financial Services, earnings decreased substantially due to the settlement agreement on concluding the Toll Collect arbitration proceedings. Exchange-rate effects had an overall negative impact on earnings. The reconciliation of segment earnings to Group EBIT in the second quarter of the year 2018 had a smaller negative impact than in the prior-year quarter.

“The automotive industry and therefore we too have many challenges to overcome. That’s why it’s important that we systematically implement our strategy,” stated Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. “We plan to further strengthen and expand our position with numerous new models and technologies. We are focusing on innovative technologies not only with our CASE strategy, at the same time, we are using Project Future to shape our company for a sustainable and successful future. In this way, Daimler is optimally positioning itself for the future in terms of technology, culture and structure.”

Bodo Uebber, member of the Board of Management of Daimler AG responsible for Finance and Controlling and Daimler Financial Services, said “The second quarter featured various external factors that had a significant impact on our earnings.  Despite these factors, we were able to achieve EBIT of €2.6 billion (Rs 19,874 crore). These earnings and the good liquidity and financial situation enable us to continue investing in the future and in new technologies. In addition, we have made optimum use of the favourable conditions in a volatile environment and have created a long-term liquidity buffer with the early renewal of the existing credit line at attractive conditions.”

Division performance

According to the company, Mercedes-Benz Cars saw sales of 590,700 vehicles in the second quarter of CY2018 which was at the high prior-year level (-1%). In Europe, 7 percent fewer vehicles of the Mercedes-Benz and smart brands were sold compared to same period last year, while sales in Germany decreased by 4 percent. In China, the division’s biggest market, a new record was set with an increase of 11 percent, and best-ever unit sales was also achieved in South Korea (+9%) and India (+34%).

Daimler Trucks’ saw sales of 123,900 vehicles, up 6 percent than in the second quarter of last year (Q2 2017: 116,400). The sales volume in the NAFTA region increased to 44,300 units (Q2 2017: 42,300). Sales of 7,900 units in Latin America was significantly higher than in the prior-year quarter (Q2 2017: 7,000); in Brazil, sales increased by more than 50 percent to 4,400 units.

In the EU30 region, sales increased slightly to 21,100 units (Q2 2017: 20,400), while sales of 7,800 units in Germany was lower than the prior-year volume (Q2 2017: 8,100). In Turkey, 1,700 trucks were sold (Q2 2017: 2,900). In the Asia region sales increased by 13 percent to 40,300 vehicles, in addition to a significant increase in Indonesia to 16,400 units (Q2 2017: 9,800), growth was achieved also in India with sales of 5,800 vehicles (Q2 2017: 3,600). Sales of 10,400 trucks in Japan were slightly higher than in the prior-year period (Q2 2017: 10,200). Sales of 2,000 units in the Middle East were significantly lower than in the second quarter of last year (Q2 2017: 6,400).

Daimler Buses sold 7,500 units, at the level of the prior-year period. In the EU30 region, sales of 2,200 complete buses and bus chassis of the Mercedes-Benz and Setra brands were also in the magnitude of the second quarter of last year. Despite undisputed market leadership, sales of 700 units in Germany, the domestic market, did not match the prior-year level (Q2 2017: 800). The market recovery in Brazil has slowed down, but sales of 2,500 units was 18 percent higher compared to same period last year. In Latin America (excluding Mexico), Daimler Buses’ sales of 3,400 units was slightly below the previous year’s level. Sales of 800 units in Mexico was lower than in the prior-year quarter (Q2 2017: 1,000). However, Daimler Buses achieved strong growth in India with sales of 500 units (Q2 2017: 250).

Growth outlook
The company expects to slightly increase its total units sales in the year 2018, and in particular for the Indian market the company expects Daimler Trucks to see significant sales growth in the country. And a positive development of unit sales for Daimler Buses.