BMW said earnings rose 12% in the first quarter even as the war in Ukraine and Covid-lockdowns in China disrupted the automaker’s supply chain.
Group earnings before interest and tax rose to 3.39 billion euros (R57 billion) in the first quarter, the company said Thursday, exceeding analyst estimates of 2.9 billion euros (R48 billion).
BMW confirmed the outlook for the year that it outlined in March, when it said Russia’s invasion of Ukraine will push down automaking returns to between 7% and 9%.
That’s slightly less than the 8% to 10% range it had estimated before the war broke out.
The Bavarian carmaker and its rivals have shifted production to higher-margin models as output has been hampered by the semiconductor shortage and other supply-chain problems.
Despite delivering 6% fewer cars in the first quarter, BMW’s auto revenue rose 17% compared with the same period last year.
“Never before in the history of our company have our pre-orders been higher than they are today,” Chief Executive Officer Oliver Zipse said.
“The markets signal that this high demand will continue.”
BMW’s shares rose 2.2% at 10:04 a.m.
Profitability in BMW’s auto division was behind rival Mercedes-Benz, which posted a record margin of 16.4% for its cars division in the first quarter.
BMW’s operating return on automaking was 8.9% in the first quarter, compared with analyst expectations of 7.8%.
Group revenue was buoyed by the full consolidation of BMW’s China joint venture, which contributed 3.3 billion euros (R55 billion) since mid-February, BMW said.
BMW’s automaking returns are expected to pick up during the second half of the year.
In mid-April, BMW presented the new generation of its flagship 7 Series, including the i7 all-electric variant, which will go on sale in November.
An upgraded version of its high-margin X7 SUV will be sold from August onwards.