BMW returns to profit in Q2

German luxury car maker BMW yesterday said it had returned to profit in the second quarter and was in talks with French auto group PSA, but was cautious on its full-year outlook.

BMW said it had made a net profit of €121 million (Dh640m) in the three months from April to June, well above an average analyst forecast for a loss of €25m compiled by Dow Jones Newswires.

In the first quarter, BMW had posted a net loss of €152m. The second-quarter figure, while back in the black, was 76 per cent less than the profit of €507m BMW had posted in the same period a year earlier.

Combined with its loss in the first quarter of this year, BMW recorded an aggregate loss of €31m for the first half of 2009.

Its main rival Daimler, which makes Mercedes-Benz, released its own second-quarter figure in late July, a loss of €1.06 billion and its third drop in a row.

A BMW statement said it managed to partially offset an 11-per cent drop in sales, which fell to €12.9bn, with lower costs.

Unit sales shed 19.5 percent to 615,000 vehicles.

Core earnings before interest and taxes, which are closely followed by analysts, plunged by 60 per cent to €169m, but were nonetheless also better than expected.

Chairman Norbert Reithofer said in a statement that "even though some indicators suggest that the economic situation might improve in the second half – we remain cautious".

He told a conference that BMW was speaking with PSA Peugeot Citroen about extending their co-operation, which currently concerns motors for small cars. "Good discussions have been held," he said.

A PSA spokesman declined to comment.

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