MUNICH (dpa-AFX) - Shares of BMW Group (BMW.L, BAMXF.PK, BAMXY.PK) traded around 2 percent higher after the German auto giant said Tuesday that it expects slight increase in fiscal 2017 profit before tax and that its business is expected to develop positively. In its fiscal 2016, the company reported higher earnings with increased sales volume.
Looking ahead, the company noted that competition on international automobile markets is set to remain intense during the current year, amid political and macroeconomic uncertainties in Europe as well as the impact of the Brexit decision in the UK. Moreover, the strategy of the new US administration regarding economic policy remains unclear.
However, BMW Group intends to continue its growth course in 2017 with the introduction of numerous new automobile and motorcycle models.
Based on the forecast of a slight increase in deliveries to customers, Automotive segment revenues are also expected to increase slightly in 2017. BMW expects a further year-on-year increase in sales of BMW, MINI and Rolls-Royce brand vehicles.
Further, BMW expects the upward trend in the Motorcycles segment to continue, with deliveries to customers expected to rise significantly.
According to BMW, the world's automobile markets in 2017 are forecast to grow by around 1.8 percent to an estimated 89.0 million units. The US market is expected to grow by 0.3 percent to 17.6 million units, while China would record a 5.7 percent increase to some 25.5 million units.
In fiscal 2016, the company's net profit to shareholders increased to 6.86 billion euros from 6.37 billion euros in the prior year. Earnings per share were 10.45 euros, compared to 9.70 euros last year.
Profit before tax grew 4.8 percent from last year to 9.67 billion euros, while profit before financial result, or EBIT, decreased 2.2 percent to 9.39 billion euros.
Fiscal 2016 revenues were up 2.2 percent to 94.16 billion euros from 92.17 billion euros in the previous year. Automotive revenues increased 1.0 percent to 86.42 billion euros.
In the year, automotive segment production volume grew 3.5 percent to 2.36 million units and sales volume increased 5.3 percent to 2.37 million units. Sales volume of BMW grew 5.2 percent, MINI increased 6.4 percent and that of Rolls-Royce improved 6 percent.
Motorcycles segment sales volume went up 5.9 percent from last year to 145,032 units.
Further, the company announced an increased dividend of 3.50 euros per share of common stock and 3.52 euros per share of non-voting preferred stock.
In Germany, BMW shares were trading at 84.38 euros, up 2.28 percent.
Copyright RTT News/dpa-AFX