During the first semester of this year both companies, Fiat SpA and Chrysler LLC, sold 2.18 million units worldwide (Ferrari and Maserati included), up 2,4%. That’s 42 billion euros (Magneti Marelli, Teksid and Comau included), up 0,8% on 2012-I. Despite this tiny growth in registrations and revenues, the group’s profits (EBIT) fell 6% to 1,66 billion euros, or 3,94% margin. One year before the margin was 4, 23%. And contrary to what anyone could think, the reason for this deterioration is explained by NAFTA and LATAM markets, where growth rates seem to stabilize, and Chrysler Group. Yes, Europe and Fiat brands contributed to ‘positive’ results, as the cost reduction plan allowed EMEA (led by Fiat) to reduce its loses from 354 million euros in 2012-I to 185 million this year. Therefore Fiat Group (all regions) was able to rise its profits from 104 million euros to 155 million, while Chrysler Group’s profits (still highly concentrated in NAFTA) fell 9,5% to 1,5 billion. Anyway Chrysler’s earnings counted for 91% of the whole group! APAC region had also an important role in terms of revenue and profits. It had the biggest increase in both, volume and percentage change, due to more registrations in China and Australia, which helped to offset the increasing expansion costs.
In terms of cash, the situation is unchanged. The whole group has available 18 billion euros plus 3 billion in open credits accounts, and has a total debt of 28,5 billion euros. In March 31st 2013, they owed 29 billion, and had 18,3 billion at home and almost 3 billion available in credits. In the first semester of this year Fiat-Chrysler managed to increased its deliveries (sales) no matter the big crisis in Europe, thanks to China, Australia, and somehow USA, Canada, Brazil and Argentina. This tiny growth allowed the group to increase its revenues with a lower growth due to a worse mix price-product. The cost reduction in Europe wasn’t big enough to offset the increasing industrial expenses (USA), expansion costs (China), and currency change losses (LATAM). Therefore Earnings Before Interests and Taxes fell 6%. In the meantime, Fiat keeps looking for any possibility to buy the remaining 31.51% it doesn’t own yet, as it will be crucial for the future of both companies, and specially for the future of Alfa Romeo and Lancia. In that case the Italians will be able to get Chrysler’s cash and fix some problems at home.