BMW reports solid revenue growth in first half

BERLIN (Reuters) -BMW on Thursday reported significantly higher revenues for the first half at 74 billion euros ($80.87 billion), due in part to the integration of its Chinese joint venture BMW Brilliance Automotive (BBA) as well as higher sales and pricing.

Its earnings before interest and taxes (EBIT) came in at 9.7 billion euros, up 42.6%, but net profit fell to 6.6 billion euros, also due to the impact of integrating BBA the previous year, it said.

BMW paid 3.7 billion euros to take majority control of the Chinese joint venture in February last year, pushing up earnings before tax in the first half of 2022 by 7.7 billion euros.

The drop in profit this year was primarily down to a higher tax rate compared with previous years because of the consolidation, the company said.

Group research and development spending was up 15.4% in the first half, focused on electrification and automated driving, and capital expenditure rose 10.3%.

Higher material and manufacturing costs also weighed on results in the first half, it added.

The carmaker confirmed preliminary results released earlier this week lifting its annual outlook for its EBIT margin in the automotive segment, but said it foresaw ongoing challenges from supply chain issues and inflation in the second half of the year.

It now expects an EBIT margin in its cars division of 9%-10.5%, from 8%-10% previously, and solid growth in its deliveries, up from a previous forecast of only slight growth, on the basis of a strong order bank and improved availability of its premium vehicles.

But it reduced its forecast for free cash flow to above 6 billion euros from around 7 billion euros previously, citing the need to build up inventories and invest more in electrification.

($1 = 0.9150 euros)