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BMW pre-tax profits fall in Q1

The BMW Group revealed a 34.3% drop in pre-tax profits for the first quarter of 2007 to €852 million (£582m) compared to €1,296m (£885m) for Q1 2006.

However, revenues rose by 2.9% to €11,951m (£8,161m) in Q1 compared to €11,618m (£7,932m) over the same period a year ago.

The German manufacturer said it was still on track to hit targets despite ‘adverse currency factors, high raw material prices and high start-up costs for new models’.

First-quarter profit after tax, was recorded at €587m (£401m), 38.1% lower than the previous year's figure of €948m (£647m).

BMW achieved a €375m (£256m) extraordinary gain last year due to bonds it had issued which were convertible into shares of aero engine maker Rolls Royce.

"Three months into the year, we are right on course to achieve our targets for the full year. In addition to increasing sales volume in the high single-digit percentage range to over 1.4 million vehicles, the BMW Group is aiming to achieve a pre-tax profit, which, adjusted for the gain on the Rolls-Royce exchangeable bond, will be above the record level posted for the previous year", said Norbert Reithofer, the chairman of the board of management of BMW.

Sales of BMW, Mini and Rolls-Royce brand cars edged up by 0.1% to 333,276 compared to 332,923 units. BMW expects the sales volume to rise in the coming months, thanks to new model launches.

BMW brand sales in the first three months increased by 1.0% to 286,185 (283,297 in Q1 2006) units. First-quarter sales volume of the Mini brand fell by 5.1% to 46,978 (49,519, Q1 2006) units due to restricted model availability.

Rolls-Royce Motor Cars handed over 113 Phantoms to customers, 5.6% more than in the same quarter last year (107 units), with growth coming particular from North America and Asia in particular.

BMW said the first-quarter profit before tax of the automobile segment was affected by adverse currency factors, high raw material prices and model life-cycle factors. The profit before tax fell by 20.0% to €609m compared to €761m (£416m) in Q1 2006, while revenues edged up by 1.7% to €11,418m (£7,796m), compared to €11,231m (£7,667) over the same period a year ago.

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