FX.co ★ BMW Q4 Results Climb; Cuts Dividend, Sees Weak Earnings In FY24

On Thursday, automobile giant BMW Group announced an increase in their fourth quarter profits, attributing the boost to strong demand that elevated revenues. Nonetheless, the company's net earnings for the fiscal year of 2023 witnessed a decrease, leading to a trimming of dividends.

Despite this, BMW anticipates a slight decrease in pre-tax earnings for 2023, with an Automotive EBIT margin projection of 8-10 percent, lower than the prior year's figure of 9.8 percent. BMW shares in Germany suffered a 1 percent decrease, trading at 105.26 euros.

Walter Mertl, a member of the Board of Management responsible for finance, emphasized the company's continuous focus on cost discipline and sustainable profitability. The company aims to maintain a long-term target range of 8-10 percent EBIT margin in the Automotive Segment, viewing it as a measure of success.

BMW Group also predicts a minor rise in automotive segment deliveries in 2024 and attributes its impressive performance in 2023 to the automotive segment, which reported record-breaking operating results. The group intends to sustain this profitable growth trajectory in 2024, with full-electric vehicles (BEVs) and models from the premium segment projected to be major contributors to growth, anticipating a considerable double-digit increase.

Since the start of the year, fully-electric vehicle sales have grown by a significant double-digit percentage. BMW, MINI and Rolls-Royce vehicle deliveries within the automotive segment are expected to surpass last year's numbers, thanks to a slight surge in demand, new models' full availability, and impending model launches.

The Motorcycles Segment reflects this stable demand, projecting an EBIT margin within the target range of 8-10 percent and modestly higher deliveries.

In addition, the Board of Management and Supervisory Board will propose a 6.00 euros per share dividend of common stock and 6.02 euros per share of preferred stock to the Annual General Meeting on May 15. In the previous year, the dividends per share were 8.50 euros and 8.52 euros for common stock and preferred stock respectively.

In the fourth quarter, BMW's net profit rose 20.2 percent to 2.61 billion euros, up from the previous year's 2.18 billion euros. Earnings per share also went up to 3.77 euros, a 9.9 percent increase from 3.43 euros per share a year ago. Pre-tax earnings also grew 13.2 percent to 3.68 billion euros, while Earnings Before Interest and Taxes (EBIT) saw a significant 26.1 percent rise to 4.41 billion euros.

The quarter's group revenues increased 8.7 percent to 42.97 billion euros, with automotive revenues contributing 37.28 billion euros, marking an increase of 7.8 percent. Financial services revenues also rose by 4.6 percent to 9.50 billion euros, despite a 7 percent fall in motorcycle revenues.

In fiscal 2023, despite a drop in net profits by 34.5 percent, the EBIT grew 32 percent to 18.48 billion euros, and group revenues increased 9 percent to 155.50 billion euros. The company delivered a total of 2.55 million premium vehicles to customers, an uptick of 6.4 percent from the prior year. The BMW Group also reported a dramatic surge in fully-electric vehicle sales, with an increase of 74.2 percent to over 375,000 units.