Fiat SpA Chrysler and Second Quarter
FIAT GROUP RECORDED IN THE SECOND QUARTER 2012 EARNINGS OF 1 BILLION EUROS. ALL REGIONS CONTRIBUTE POSITIVELY TO EUROPE EXCEPT WHERE REDUCED LOSSES WITH RESPECT TO THE FIRST QUARTER. INDUSTRIAL NET DEBT REDUCED TO 5.4 BILLION EUROS
Revenues totaled EUR 21.5 billion, EBIT amounted to EUR 1 BILLION AND NET PROFIT IS 358 MILLION EUROS. AVAILABLE LIQUIDITY ASCENDED A 22.7 BILLION EUROS
· Revenues reflect strong growth in NAFTA and in the APAC, a slowdown in LATAM, although the Brazilian market rebounded strongly in June, and a decline in EMEA due to continued deterioration of the European economy.
· The profit was EUR 1 billion thanks to the good performance of the Chrysler brand in the NAFTA and APAC, EMEA while the loss has been reduced by approximately 70 million euros over the first quarter. For LATAM, the trading profit was in line with the expectations of the year. A positive development for Ferrari and Maserati with a trading profit up 16%.
· Worldwide sales of cars mass-market brands grew by more than 1.1 million units (reaching 2.1 million to date).
· The net industrial debt was reduced to 5.4 billion euros (5.8 billion euros at the end of first quarter), with 0.6 billion of positive chashflow Chrysler, which more than offset the negative cash flow of EUR 0.2 billion recorded by the rest of the group.
· The total available liquidity improved to 22.7 billion euros (21.4 billion euros at the end of first quarter), including 3 billion euros in credit lines available.
· Despite the continued lack of visibility regarding business conditions in Europe, the Group confirms its target for the year.
Group revenues were 21.5 billion euros in the second quarter of 2012. Excluding Chrysler, revenues totaled 9.2 billion euros, down 7.5% from the second quarter of 2011 due primarily to lower volume in Europe, particularly in Italy, where trading conditions remain difficult for both private vehicles as for light commercial vehicles as a result of the economic situation. Luxury brands and sports revenue increased by 8.7%, 0.8 billion euros, driven by growth in Asia and North America. Components fell 4.9%, 2 billion euros, due mainly to weakness in the European automotive industry.
The gain for the second quarter of 2012 was 1 billion euros. The NAFTA region reported a trading profit of € 717 million, 238 million euros LATAM and APAC 64 million euros, while the EMEA region recorded a loss of 138 million euros. Luxury Brands and Sports and Components business contributed 104 million and 47 million respectively. Fiat’s earnings, excluding Chrysler, was 144 million compared to the 375 million in the second quarter of 2011. The decline mainly reflects the drop in volumes in Europe and to a lesser extent, Latin America, which was partially offset by industrial efficiency, the cost containment actions and synergies of the group.
EBIT was 995 million euros (102 million euros excluding Chrysler). For mass-market brands in the region on a pro forma basis, EBIT was as follows: NAFTA increased by 80% to 744 million euros, driven by strong volume growth, the LATAM was 238 million euros, below the 352 million euros in the second quarter of 2011 due to lower volumes, pressure on prices and currency translation effects, the APAC more than tripled to 60 million euros, improvements in volumes and margins. EMEA reported a loss of 184 million euros compared to 406 million euros last year. This year includes a charge of 91 million atypical represented by the depreciation of investment in JV Sevelnord following agreement with PSA while the second quarter of 2011 included extraordinary costs by 372 million euros resulting from the rationalization of the portfolio after acquiring control of Chrysler. Excluding extraordinary items, losses totaled 96 million euros in the second quarter of 2012 and 34 million euros in the second quarter of 2011.
Net financial expenses amounted to 463 million euros. Excluding Chrysler, net interest expense was 256 million, compared to 160 million in the second quarter of 2011, reflecting higher debt levels (with a loss of 9 million euros in brand equity at market prices of the shares of Fiat of options related to equity swaps, compared to zero in the second quarter of 2011).
The result before taxes was 532 million euros. Excluding Chrysler, there was a loss of 154 million euros, compared with a profit of 1.504 million euros in the second quarter of 2011. Excluding exceptional items the loss amounted to 60 million euros versus a profit of 223 million euros in the second quarter of 2011, the difference of 283 million reflects a decrease of 187 million euros in EBIT d before extraordinary items and an increase of 96 million euros in net expenditure.
The income tax amounted to 174 million euros. Excluding Chrysler, income taxes were 92 million and relate primarily to the taxable income of companies operating outside Italy and employment-related taxes in Italy.
The net profit was 358 million in the second quarter of 2012 (103 million attributable to shareholders of the parent). Excluding Chrysler, there was a loss of 246 million, compared with a profit of 1.380 billion euros for the second quarter of 2011, excluding unusual charges, the loss was 152 million euros in the second quarter of 2012 compared to EUR 76 million gain in the second quarter of 2011.
Industrial Net debt at 30 June 2012 was 5.4 billion euros, a reduction of more than 0.3 billion in the second quarter of 2012. In the quarter, Chrysler generated 0.6 billion in cash, after investing approximately 1 billion euros. Excluding Chrysler, net industrial debt was 4.1 billion euros, an increase of EUR 0.2 billion attributable equally to cash absorbed by operations, including 0.7 billion euros of investment, and the elements money. Capital expenditures totaled group 1.7 billion euros.
The total available liquidity, including unused credit lines (3 billion euros, unchanged at the end of first quarter net impact of currency translation), improved to 22.7 billion euros (21.4 billion euros end of first quarter), of which 12.1 billion euros related to Fiat and Chrysler excluding EUR 10.6 billion to Chrysler. In early July, was issued a bond loan of EUR 600 million under the GMTN program, completing the coverage of the maturities of the bonds in 2012 and third in 2013.
Group revenue amounted to 41.7 billion euros in the period. Excluding Chrysler, revenue was 17.9 billion euros, a decrease of 6.6% over 2011 due mainly to the decline in volume in Europe. Luxury Brands and Sports reported net income of 1.4 billion euros, 10%, driven by growth in Asia and North America. The components were reduced by 1.6%, 4 billion euros.
Proceeds from the first half of 2012 were 1.876 million euros. The commercial benefit of Fiat, excluding Chrysler was 138 million euros compared to 626 million euros in the first half of 2011. For Luxury Brands and Sports, the commercial profit increased by 15.1%, 175 million euros, while the components registered a decline of 19.4%, 83 million.
EBIT was 1.890 million. Excluding Chrysler, EBIT was 114 million. For mass-market brands in the region on a pro forma basis: NAFTA EBIT increased by 80%, 1.425 million, driven by strong volume growth, for LATAM, EBIT was 473 million compared to the 658 million in the first half of 2011, APAC nearly tripled to 145 million, an improvement both in terms of volumes and margins. EMEA reported a loss of 354 million euros, including unusual expenses of EUR 90 million following the devaluation of interest in the JV Sevel Nord, compared with a loss of 472 million in the first half that included unusual costs EUR 373 million resulting from the rationalization of the portfolio following the acquisition of control of Chrysler. Excluding extraordinary items, the loss was 264 million euros in the first half of 2012 compared to 99 million euros in the first half of 2011.
Net financial expenses amounted to 838 million euros. Excluding Chrysler, net interest expense was 422 million euros versus 298 million euros, reflecting higher debt levels with a positive marginal impact of marking to market of the swap action plans related to stock options from Fiat.
Profit before tax was EUR 1.052 million. Excluding Chrysler, there was a loss of 308 million euros compared to 1.657 million euros in the first half of 2011. Excluding extraordinary items, losses were 214 million euros in the first half of 2012 compared with a profit of 376 million euros in the same period 2011, a decrease of 590 million euros in the first half of 2011 reflects the reduction of 466 million euros in EBIT and higher net financial expenses.
The income tax amounted to 315 million euros. Excluding Chrysler, income taxes were EUR 211 million and relate primarily to the taxable income of companies operating outside Italy and employment-related taxes in Italy.
The net profit was 737 million euros for the first half (€ 207 attributable to shareholders of the parent). Excluding Chrysler, there was a loss of 519 million euros compared to a profit of 1.417 million euros in the first half of 2011, excluding extraordinary items, the loss was 425 million euros in the first half of 2012 compared with the gain 113 million euros in the first half of 2011.
Industrial Net debt at 30 June 2012 was 5.4 billion euros, compared to 5.5 billion euros at year-end 2011. Chrysler reduced its net industrial debt 1.7 billion euros, more than offset the absorption of the rest of the group 1.6 billion euros (of which 1.4 billion euros correspond to the first quarter of 2012). The total capital investment of the Group was 3.2 billion euros, of which EUR 1.3 billion deal with Fiat excluding Chrysler, in line with the first half of 2011.
On May 23, Fiat Group Automobiles SpA (Fiat) and Mazda Motor Corporation (Mazda) signed a non-binding Memorandum of Understanding (MoU) for the development and production of a new roadster for Mazda and Alfa Romeo brands, based on next-generation Mazda MX-5 with architecture rear.
On 28 June, a ceremony was held in Fiat-GAC, the plant in Changsha, China, for the inauguration of the new factory and launch of the Fiat Viaggio, the first model Fiat produced in China by the JV.
On July 3, Fiat VEBA1 informed their wish to exercise the option to purchase a portion of the share in Chrysler VEBA owns 2. This exercise concerns the first installment of capital subject to the option Chrysler and amounts to nearly 3.3% stake in Chrysler.
On July 25, The establishment of Fiat Pomigliano D’Arco was awarded the prestigious international “Automotive Lean Production 2012″ in the OEM category, after a rigorous process of analysis and evaluation by a committee of experts selected by the German magazine “Automobil Produktion” and the Consultant Agamus Consult.
On July 26, FGA and PSA Peugeot Citroën have signed an agreement providing for the transfer of FGA participation in joint venture with PSA Peugeot Citroën Sevelnord on or before December 31, 2012 to a symbolic value. Sevelnord continue to produce light commercial vehicles for both groups until the regulations come into force Euro6 end of 2016. This agreement does not affect other cooperation between PSA Peugeot Citroën and FGA, including Sevel joint venture located in Val di Sangro, Italy, which will continue under existing contracts.
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