Fiat Announces 21% Drop in Pre-Tax Profits for 2008, Foresees 20% Less Sales in 2009
Two days after announcing its plans to acquire a 35 percent stake in Chrysler LLC, Fiat S.p.A. released the group's 2008 calendar year results and at the same time, revealed its gloomy outlook for 2009. The Fiat Group's total revenues for 2008 totaled €59.4bn, up 1.5% from 2007, with the firm's record first-half performance (+10.9%) being offset in the second-half (-7.7%) and especially in the fourth quarter (-17.2% vs 2007). However, the group's pre-tax net profits for 2008 plunged 21% to €2.2bn while the Italian company announced a significant increase (+36% vs 2007) in net industrial debt to €5.9bn.Fiat also revealed that at 31 December 2008, the Group's liquidity stood at €3.9 billion, which is significantly lower than last year's €6.9 billion. As a result, the company said that it would not pay a dividend this year. "In order to preserve liquidity, the Board will not propose a dividend for 2008, except for dividends on savings shares (€25 million as mandated in the Company's by-laws). The buy-back programme has been placed on hold," said the company in a statement.
In what concerns Fiat's automotive sector, the company delivered a total of 2,152,500 cars and light commercial vehicles in 2008 - down 3.6% from the prior year. Despite the decrease in volumes, Fiat Group Automobile's revenues for 2008 were essentially flat (+0.5%) compared to 2007, at €26.9 billion. Fiat said that it was able to offset the lower vehicle sales by improving pricing and product mix, in addition to increased sales to joint ventures.
For 2009, Fiat said that it foresees a 20 percent decline in global demand for its products compared to 2008, and that it expects the Group's net industrial cash flow to be in excess of €1 billion, with net industrial debt levels falling below the €5 billion mark.
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