BMW Hit by China Slowdown as Samsung Profits Soar and Adidas Gains World Cup Boost

The crisis in the Chinese car market is taking a toll on the balance sheet of automaker BMW. In the past quarter, the Munich-based company’s net profit plummeted by 34.9 percent to €1.2 billion, according to figures released on Thursday. Revenue simultaneously shrank by 7.9 percent to just under €31.3 billion.

BMW’s crucial profit margin in its automotive business fell to 2.3 percent. This revenue decline was thus steeper than analysts surveyed by the company had predicted. “Competition has noticeably intensified in the global automotive market,” said CFO Walter Mertl. Accordingly, BMW is intensifying its cost-cutting measures. On Wednesday, BMW announced plans to eliminate thousands of jobs in Germany.

BMW is sticking to its forecast, which it lowered in June. Instead of a moderate decline, the Munich-based company is predicting a drop in pre-tax profit of more than 15 percent for the full year. The profit margin in the automotive business, which is crucial for the company, is expected to be just one to three percent.

Lufthansa plans to acquire a stake in Portugal’s airline TPA

Germany’s Lufthansa and its French competitor Air France-KLM are locked in a bidding war for the Portuguese airline TPA, which is state-owned.

According to Reuters, Lufthansa and Air France have submitted binding offers to the Portuguese government for the purchase of a minority stake. Portugal reportedly intends to sell 44.9 percent of TPA to a strategic partner.

Adidas expects double-digit sales growth after the FIFA World Cup

The FIFA World Cup in North America is giving Adidas a boost. The world’s number two in the sporting goods market is now aiming for double-digit sales growth this year, but is maintaining its profit forecast. At the World Cup, 14 of the 48 national teams wore Adidas jerseys, including the two finalists, Spain and Argentina. This drove up sales of fan jerseys, and apparel revenue rose by 35 percent in the second quarter, adjusted for currency fluctuations.

Nevertheless, investors were disappointed: they had expected a more significant upward revision of the targets, said one trader. Shares in the Herzogenaurach-based company plummeted by more than 15 percent.

Adidas now expects currency-adjusted sales growth of nine to ten percent for the current year. Previously, CEO Björn Gulden had projected up to nine percent. After the first six months, the company has already recorded a currency-adjusted increase of 14 percent to €13.3 billion. In euro terms, the increase was 10 percent. Adidas continues to forecast operating profit of around €2.3 billion (previous year: €2.06 billion).

This could be supplemented by refunds of US import duties of $250 million to $300 million, which are not yet included in the forecast but “may be realized in the future.” The company received its first tariff refunds in the second quarter. In the first half of the year, operating profit improved by 11 percent to €1.28 billion, with the operating margin remaining unchanged at 9.6 percent. The gross margin was 51.8 percent (51.9 percent). (Reuters)

Samsung’s operating profit rises by more than 1800 percent

Driven by global demand for memory chips for artificial intelligence, the South Korean technology giant Samsung has massively increased its profits. The company announced that its operating profit for the second quarter reached 89.49 trillion won (nearly 54 billion euros), an increase of 1,813 percent compared to the same period last year.

Revenue for the period from April to June amounted to 171.49 trillion won, a year-on-year increase of 130 percent. Net profit jumped by almost 1,300 percent to 71.62 trillion won.

This immense increase in revenue and profit was announced amid a challenging stock market environment: the South Korean stock market experienced one of its steepest declines in history on Wednesday. Major chipmakers Samsung and SK Hynix, which had experienced a steep rise in recent months due to the demand for semiconductors fueled by the AI ​​boom, also suffered significant losses.

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(Featured image by Devon Janse van Rensburg via Unsplash)

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