Conglomerate (for automobile industry) - Audi calls itself in the second quarter
Audi is slowly making its way through its current weakness phase. In the first half of the year, the company made roughly 1.1 billion Euro less profit and saw a decline in revenue by 3.2 billion Euro, as the VW subsidiary announced. Although these numbers may appear bitter at first glance: they show a clear upward trend, as the first quarter reported losses that were only slightly lower. The revenue was almost at previous year level in the second quarter, while the profit was just slightly below. Financially, Jürgen Rittersberger emphasized: "The second quarter was significantly better than the first quarter. We were able to catch up."
Contributing to this was the easing of supply issues for parts of the large V6 and V8 engines, which are usually installed in more expensive and high-performance cars. Now, Rittersberger stated, "we are again very well supplied." In the third quarter, he expects normal production again, which will not only help the company in terms of volume but also in terms of earnings. Specifically, the revenue in the first half of the year amounted to 30.9 billion Euro, and the profit was just under 2.2 billion.
Lower profit forecast
Nevertheless, Audi lowered its profit expectation for the entire year. The forecast for the operational earnings before interest and taxes (EBIT) now lies between 6 and 8 percent - instead of 8 and 10. According to Rittersberger, the costs for the restructuring in Brussels are the reason. The entire plant is on the brink - among other things, because the electromobility models produced there are being discontinued prematurely. Audi currently did not provide any further details about Brussels.
Overall, Audi is still in a "transition year," Rittersberger said - as already announced after the first quarter. However, he expects significant improvements through numerous new models that are gradually being introduced. These models are expected to give the recently stagnant growth in electric cars a "substantial push" starting from the fourth quarter and especially the next year. However, Audi does not intend to enter the current price competition for electric cars in China. This competition is "ruinous," said the CFO.
- Despite the challenges faced by the Automobile industry in Germany, especially during this weak phase, Audi in Bavaria managed to show a clear upward trend in its financial performance.
- The Audi Conglomerate, based in Ingolstadt, reported a decline in revenue and profit in the first half of the year, but significantly improved in the second quarter, with revenue almost at the previous year's level.
- The weak phase for Audi was partly due to supply issues for large V6 and V8 engine parts, but these issues have been ameliorated, leading to expectations of normal production and earnings in the third quarter.
- Despite the improvements, Audi has lowered its profit expectation for the entire year due to the high costs associated with the restructuring in its Brussels facility, which is currently experiencing challenges, including the discontinuation of certain electromobility models.
- To drive growth in the electric car market, Audi plans to introduce numerous new models, expecting a substantial push starting from the fourth quarter and the next year, avoiding the ruinous price competition in China's electric car market.
