28.02.2004 FIAT POST A FINAL QUARTER OPERATING PROFIT AS THE RESTRUCTING PLAN START TO TAKE GRIP
Fiat have released their fourth quarter results, and the signs are showing through that the restructuring plan that swung into effect during the latter part of the year is starting to bear fruit as the Group posted a final quarter operating profit of €142 million, around €20 million up on analysts forecasts.
However the overall group net loss of €1.11 billion ( down from €2.97 billion year-on-year ) was well above expectations, and this, combined with poor margins throughout the Auto Division sent shares down.
The Auto Division made an operating loss of €97 million in the fourth quarter, which while mildly disappointing analysts, Fiat bosses believe is significant and keeps them on target for a break even by 2005. The introduction during the second half of the year of a raft of new models including the Car of the Year winning Fiat Panda, Idea and Lancia Ypsilon, together with the revamped Fiat Punto and Alfa Romeo 156 and 166 saloons helped revive interest in the group's brands.
Costs savings from joint venture operations with General Motors saved Fiat around €600 million last year and they confidentially predict this to rise to over €1 billion this year. With the two companies continuing to explore further areas of co-operation, and most future models scheduled sharing floorpans and mechanical components this costs in this area are expected to fall significantly.
Fiat Auto final quarter turnover at €5.7 billion was pretty much the same as 2002 when govenment cash incentives distorted figures, the full year operating loss came in at €979 million while Group full year turnover slid to €12.66 billion, down year-on-year from €14.91 million, a figure that reflects the divestiture of key assets during the course of the year.
Fiat CEO Guiseppe Morchio revealed that the cost of restructuring the auto division is expected to rise by €300 million from an initial estimate of €1.8 billion, but that this extra cash would be found from additional disposals.
Meanwhile Italian new car registrations are forecast to dip this month to around 206,000 units, down around 6,000 year on year when government cash incentives were in force ), although Fiat's share is expected to hold at around 30% ( down only a fraction on January's 30.9% ).