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BMW reveals profit fall

BMW posted a 15% fall in quarterly pre-tax profit yesterday as pricing pressure, a weak dollar and high raw material prices impacted on results.

Second-quarter earnings before tax fell to €916m (£630m) from €1.08bn (£749m) a year ago.

"The negative currency impact caused by unfavorable transfer exchange rates, the additional cost of raw materials and more intense competition meant that the record levels achieved in the previous year could not be repeated," BMW said in a statement.

Pre-tax profit at the automobiles division fell 17% to €808m (£561m). The division's pre-tax profit margin sank to 6.8% from 8.4% a year earlier.

The group reiterated it aims to keep 2005 group earnings roughly at the same record level as last year, despite an expected 6% to 9% increase in vehicle sales.

Net profit in the quarter slipped 1.2% to €663m (£460m) amid positive effects from one-off tax issues, beating market expectations. Revenues rose 2.1% to €12.16bn (£8.4bn).

Early in July, BMW reported that group vehicle sales rose 9.4% to 646,531 units as BMW brand deliveries gained 8.6% to 538,132 and Mini brand sales rose almost 14% to 108,114 cars.

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