By Kim Richters
BMW AG said on Wednesday that the effects of the war in Ukraine were restricting its production and impacting the outlook for the current year, although profits are expected to rise significantly thanks to the consolidation of its Chinese joint venture.
The German luxury carmaker said it expects car deliveries this year to be at the same level as in 2021 as the situation in Eastern Europe affects production.
“Without these negative effects, year-over-year deliveries in the automotive segment would have been expected to increase slightly,” BMW said.
The company also forecasts a profit margin before interest and taxes for its automotive segment between 7% and 9% in 2022, compared to 10.3% in 2021.
“Without the impact of the war in Ukraine, the BMW Group would have targeted a range of 8% to 10%,” he said.
The carmaker also expects free cash flow from its automotive segment to reach at least 7 billion euros this year and group profit before tax to increase significantly thanks to the previously announced consolidation of the joint venture. BMW Brilliance Automotive.
As previously announced, BMW said it would see positive one-time effects from the consolidation on automotive segment profits and revenues, which are expected to increase significantly. The consolidation does not affect the Ebit margin of the segment.
BMW released figures for 2021 earlier this month, with after-tax profit rising to 12.46 billion euros from 3.86 billion euros in 2020, and revenue rising to 111.24 billion euros against 98.99 billion euros.
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