Daimler Quarterly Profit Jump Defies China Slowdown

Daimler\'s second-quarter operating profit jumped 54 percent to a record quarterly high.

Published: 23rd July 2015 02:32 PM  |   Last Updated: 23rd July 2015 02:32 PM   |  A+A-

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Workers assemble Mercedes-Benz S-class models at their plant in Sindelfingen near Stuttgart January 28, 2015. REUTERS/Michael Dalder/Files

FRANKFURT: Daimler's second-quarter operating profit jumped 54 percent to a record quarterly high as sales of trucks and new luxury car model launches helped it defy a slowdown in China.

Adjusted earnings before interest and tax (EBIT) rose to 3.8 billion euros ($4.15 billion), Stuttgart-based Daimler said on Thursday, well above the 3.31 billion euros forecast in a Reuters poll.

The profit margin at its cars division was boosted by the global rollout of a new C-Class and the launch of the top-end Maybach S-Class.

Analysts cheered the results and shares rose 2.2 percent in early trading.

"Daimler has never reported a higher clean EBIT number in a quarter in its history," analysts at Evercore ISI said.

Analyst Juergen Pieper of Bankhaus Metzler said: "The Stuttgarters are leaving the pack behind. That could continue for the next five or six quarters."

While rival auto makers recorded a slowdown in China sales thanks to an economic slowdown and an anti-corruption drive, Mercedes saw June deliveries in China jump 38.5 percent.

"We expect sales momentum to continue," Daimler Chief Executive Dieter Zetsche said in response to a question about China demand.

Deliveries of Mercedes-Benz passenger cars in the first half of 2015 rose 20 percent to 500,700 vehicles, helped by a 66 percent rise in demand for the C-Class sedan, Daimler's top-selling model.

Zetsche said Mercedes-Benz cars had not yet reached their product launch sweet spot as the carmaker is working on a new version of its E-Class that is due to hit showrooms next year.

China has seen strong demand for Daimler's top-of-the-line Mercedes-Maybach limousines, with 500 deliveries a month, Zetsche said. Prices of the Mercedes-Maybach S600 start at 187,841 euros.

Thanks to strong sales of top-end models, the return on sales from ongoing business at Mercedes-Benz Cars jumped to 10.7 percent in the second quarter, up from 7.9 percent in the same period last year.

Daimler said it expects group revenue and EBIT to increase significantly in 2015, helped by the availability of a new version of its A-Class and the GLE sports utility vehicle in September.

Daimler is the first of the German premium auto makers to release second-quarter results.

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