BMW’s Net Profit Falls 17%

March 15, 2019 at 3:08 PM

BMW AG says its net profit in 2018 slid 17% to €7.2 billion because of financial challenges that will continue in 2019.

Profits for last year also compared with an abnormally high result in 2017 that was buoyed by changes in U.S. tax rules. Still, group earnings before interest and taxes dropped 8% to €9.1 billion ($10.3 billion). The automotive group’s EBIT margin skidded 2 points to 7.2%.

BMW’s sales of passenger vehicles in 2018 advanced 1% to a record 2.49 million units. But revenue from automotive operations was flat at €85.8 billion ($97.2 billion). Companywide revenue slipped 1% to €97.5 billion ($110.5 billion).

The company cautions that “strong headwinds” will continue to buffet automotive operations this year. The major factors are political uncertainty, the cooling global economy exacerbated by trade conflict, costlier regulatory standards, exchange rates and rising raw material costs.

BMW vows greater cost-cutting measures this year, including further reductions in the number of model variants it offers.