Strong demand in China and more expensive cars helped Mercedes-Benz boost its profit in the third quarter. From July to September, the German group won €5.2 billion before interest and taxes, which is 83% more than in the same period last year, when the lack of chips delayed deliveries and ruined forecasts.
The car manufacturer has announced profits that exceed the expectations of the financial market. Net profit doubled to 4,000 million euros thanks to robust demand and the implementation of higher prices, which have been decisive for the “solid” economic result.
“Combined with ongoing cost discipline, we are making the company more resilient and thus also setting the pace for the coming months,” said Mercedes-Benz CFO.Harald Wilhelm.
Sales increased by 19% to 37.7 billion euros, meeting analyst forecasts. The star brand increased car deliveries in the summer by more than a third, to around 530,000 vehicles. Above all the Chinese businesswhich no longer suffered as much from lockdowns imposed by the pandemic, boosted sales figures.
At 14.5%, the adjusted margin in the main passenger car business area remained at the high level of the first half of the year and the operating result doubled. You continue to benefit from a special situation: due to the lack of supply due to the chip crisisthe Swabians can get higher prices and concentrate on orders for the expensive and very profitable models, like S-Class. Mercedes boss Ola Källenius focuses on class rather than mass. In this sector, orders continued to exceed supply, admits the manufacturer.
Due to the energy crisis and the restrictions caused by the pandemic in China, the company remains vigilant, secures its supply chains and reduces the use of natural gas in production, explains Mercedes. The high pressure of inflation, interest rate hikes by central banks and continuing bottlenecks in global supply chains hamper the outlook.
However, the group raises the annual profit forecast: it anticipates that the performance of car and van sales will be at least one percentage point higher and raises the forecast from 13% to 15% and from 9% to 11% respectively. Calculate that operating profit it will be significantly and not just slightly higher than the previous year’s mark of 16 billion euros, that is, by more than 15%.