Fiat Chrysler beats profit expectations
Sales in North America surge
A Fiat Chryler plant in Michigan, USA.
Profits at Fiat Chrysler beat expectations as record profits from its Jeep and Ram brands in its North American heartland offset losses racked up in China and Europe.
The group posted a 38 per cent fall in net earnings in the third quarter to € 564 million, due to a €700 million provision for possible fines and penalties relating to allegations of diesel emissions cheating in North America.
With the charge stripped out, profits rose 51 per cent to €1.4 billion.
Italian-listed shares fell 1 per cent.
Profits from its North American arm rose 51 per cent to €1.9 billion, a record, with margins of 10.2 per cent of the back of sales of new Jeep and Ram vehicles.
In Europe the company posted a loss of €25 million, following a profit of €127m a year earlier, because of delays to sales from the new testing regime that requires all models to be re-certified before sale.
The regulations, known as WLTP, have caused havoc across Europe, with several major players such as VW and Daimler unable to off all of their vehicles during September, when the rules came in.
In Asia Pacific, FCA fell to a loss of €96 million compared to a €109 million profit in the same quarter a year earlier, due to slowing sales in China.
Fiat Chrysler also pledged to begin paying dividends for the first time in its corporate history.
The group, formed by the merger of then-bankrupt Chrysler with Italy’s Fiat in 2009, will instate ordinary dividends to shareholders next year.
The group reported €200 million of industrial debt at the end of the quarter, after paying in €600 million to its US pension fund during the quarter.
The company, which reached an agreement to sell components maker Magneti Marelli to a rival parts maker owned by KKR for €6.2 billion, will return €2 billionn to shareholders through a one-off dividend this year.
Copyright The Financial Times Limited 2018