Thursday, 9 February 2012 at 13:07, Bloomberg
Mercedes will spend about €2bn to expand China production and an additional $2.4bn for its US plant. (BLOOMBERG))
Daimler AG, the maker of Mercedes- Benz cars and trucks, reported a 39 per cent increase in fourth- quarter profit, boosted by demand for the revamped M-Class sport-utility vehicle.
Earnings before interest and taxes gained to €2.18 billion ($2.9bn) from €1.56bn a year ago, the Stuttgart, Germany-based company said. The figure compared with the €2.17bn average estimate of 12 analysts surveyed by Bloomberg. Sales rose 10 per cent to €29.1bn.
Daimler today proposed a dividend of €2.20 for 2011, higher than the previous year’s €1.85, after net income for the year advanced 29 per cent to €6.03bn. The company, which is also the world’s biggest maker of heavy-duty vehicles, forecast 2012 Ebit “in the magnitude of last year.”
Daimler has vowed to retake the luxury-car lead from Bayerische Motoren Werke AG after slipping last year to third place behind Volkswagen AG’s Audi. To outpace its rivals, Mercedes plans to introduce 10 new models by 2015, including compacts and the CLS Shooting Brake, a wagon-like variant of the $71,300 four-door coupe. Costs to roll out the cars and an overhauled Actros long-haul truck may burden 2012 earnings.
“The dividend is surprisingly good and higher than the market was expecting,” said Albrecht Denninghoff, a Frankfurt- based analyst with Silvia Quandt Research. “The figures are in line, while the outlook is cautious. We’re staying with our buy recommendation.”
The shares have risen 32 per cent this year, valuing the company at €47.7bn.
Mercedes targets for 2012 beating last year’s record of 1.26 million deliveries and growing faster than a forecast pace of 4 per cent for the global auto market on demand for the revamped B-Class compact and a new A-Class hatchback.
The models are part of a line of five small cars that the brand is developing to win over younger customers. Mercedes also plans to double the variants of the S-Class flagship to six after a new version is introduced in 2013.
Mercedes will spend about €2bn to expand production in China and is investing an additional $2.4bn in its US plant. The carmaker will also open a new €800m factory in Hungary this year in a bid to reclaim the top spot in luxury vehicles that it lost in 2005. The brand aims to sell 1.5 million autos by 2014 and 1.6 million by 2015.
Daimler will have “somewhat of a transition year” in 2012 because of spending on the new models, Arndt Ellinghorst, a London-based Credit Suisse analyst, said in a note ahead of the earnings.
Daimler’s trucks division, which also makes Freightliner vehicles in the US and Fuso models in Asia, expects sales to increase this year on growth in the US and a recovery in Japan. The unit is targeting an average return on sales of 8 per cent across a business cycle starting in 2013.
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