MUNICH (dpa-AFX) - Shares of BMW AG (BMW.L, BAMXF.PK, BAMXY.PK) were losing around 3 percent in the German trading after the luxury carmaker on Wednesday reported weak net profit in its first quarter, and warned about significant drop in fiscal 2020 profit before tax due to the negative impact of the worldwide corona crisis.
BMW Group continues to expect the spread of coronavirus or Covid-19 and the necessary containment measures would seriously dampen demand across all major markets over the entire year 2020.
The company now expects full-year automotive EBIT margin of 0 percent to 3 percent, compared to earlier expected 2 percent to 4 percent, as the deliveries will be significantly lower than in the previous financial year. Motorcycles segment EBIT margin is now expected to be within a range of 3 and 5 percent with significantly weak deliveries.
In a statement, BMW said, 'Within a volatile environment, currently overshadowed by the global spread of coronavirus, business is expected to develop negatively during the financial year 2020. .. Research and development expenses will remain at a high level to propel forward-looking projects.'
For the first quarter, Group net profit dropped 2.4 percent to 574 million euros from last year's 588 million euros. Earnings per share were 0.84 euro, down 1.2 percent from 0.85 euro a year ago.
On a continuing operations basis, profit grew 5.5 percent to 574 million euros from 544 million euros last year.
Profit before tax grew 4.7 percent to 798 million euros. EBT margin for the first quarter came in at 3.4 percent, same as last year. Group EBIT surged to 1.38 billion euros from 589 million euros a year ago.
Group revenues increased 3.5 percent to 23.25 billion euros from last year's 22.46 billion euros.
In the quarter, Automotive segment revenues dropped 6.4 percent and Motorcycles revenue fell 4.9 percent, while Financial Services revenue grew 6.3 percent.
Automotive segment deliveries of BMW, MINI and Rolls-Royce brand vehicles fell 20.6 percent to 477,111 units, and Motorcycles deliveries fell 9.9 percent to 34,774 units.
In Germany, BMW shares were trading at 51.75 euros, down 3.29 percent.
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