Alliance with Chrysler a boon for Fiat
US automaker posts first full-year profit since 1997
Wednesday, 1 February 2012
01 February, 17:02
(ANSA) - Turin, February 1 - Fiat's alliance with Chrysler helped it turn a profit in 2011 while the American automaker last year posted not only its first full-year net profit since Fiat took over management control in 2009 but its first full-year profit since 1997, according to company statements released here and in Detroit on Wednesday.
Fiat and Chrysler chief Sergio Marchionne said it had been an "exceptional" year which he was "proud of".
"We're a credible player. We're seventh in the global rankings," he added.
Fiat said its net profit for 2011 amounted to 1.7 billion euros, which without extraordinary earnings, attributed in large part to the increase in value of its stake in Chrysler, would have been 800 million euros, while without its earnings from Chrysler it would have only broken even last year.
Chrysler in 2011 posted a net profit of $183 million, compared to a loss of $653 million in 2010, much due to debt payments to the US and Canadian governments.
In regard to Chrysler's turnaround, Sergio Marchionne, who is CEO at both the Italian and American automakers, said ''We are proud of what we have achieved. We now greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we have set as a company''.
The fact that Chrysler posted a profit for 2011 was even more remarkable considering the fact that during the year it repaid $551 million in debts to the US and Canadian governments, six years ahead of schedule.
Looking ahead to 2012, Chrysler said it expected to see a net profit of $1.5 billion on revenue of $65 billion, compared to $55 billion in 2011.
Chrysler in 2011 had a trading profit of two billion euros, two and a half times more than in 2010, thanks to a 22% leap in worldwide sales, while its share of the US automobile market in one year rose from 9.2% to 10.8%.
The situation was different for Fiat which struggled last year due to a weak market in Europe, especially in Italy. However, thanks to its now 58.5% stake in Chrysler, Fiat closed 2011 with earnings of 59.6 billion euros of which 23.6 billion euros were from Chrysler during the second half of the year.
Fiat's decline in sales in Europe was also in part offset by a 1.5% rise in sales in Brazil and 17.3% jump in earnings by its subsidiary Ferrari, which raked in 2.3 billion euros last year.
Fiat's net industrial debt at the end of 2011 stood at 5.5 billion euros, up 500 million euros from the previous year, most from its contribution to paying Chrysler's debt, funds used to expand its stake in the US automaker by buying out the US and Canadian treasuries and investments.
Based on the 2011 balance sheet, Fiat said it would propose distributing dividends totalling 40 million euros to those holding preferred and savings shares, while no dividends would be given for common shares.
Looking ahead to 2012, Fiat said the company would continue to suffer the negative effects of the crisis in the euro zone but expected to post a net profit of between 1.2 and 1.5 billion euros and see a trading profit of between 3.8 and 4.5 billion euros from earnings if more than 77 billion euros, while debt would remain at 5.5 billion euros or perhaps rise to six billion euros.
Fiat in 2009 acquired 20% stake and management control of Chrysler, which had filed for bankruptcy protection, in exchange for its cutting-edge green and small car technology, as well as access to Fiat's sales and service networks in Europe and Latin America.
After meeting a series of established benchmarks, including producing a more fuel-efficient Chrysler car in the US, Fiat has increased its stake in the US marque to 58.5% and the two companies, which Marchionne said were a ''perfect match'', should be fully merged by 2015, the year the CEO said he would like to retire Earlier on Wednesday Fiat Industrial, a company which was spun off from Fiat to hold its non-automotive activities, announced that in 2011, its first full year as a separate company, it had more than doubled its net profit, exceeded all its targets, with double-digit gains in all sectors, and would distribute dividends to shareholders totalling 240 million euros.
Fiat Industrial's revenues totaled 24.3 billion euros, up 13.8% over 2011, with double-digit increases for all business sectors. This resulted in a trading profit of 1.7 billion euros, 600 million euros more than the previous year, and a net profit of 701 million euros, compared to 378 million euros in 2010.
The group's net industrial debt fell from 1.9 billion euros at the end of 2010 to 1.3 billion euros, while available liquidity rose to 7.3 billion euros from 5.7 billion euros.
Fiat Industrial includes truck and bus maker Iveco and the US-based farm and earth-moving company CNH (Case New Holland).
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