Jul 27, 2022

Mercedes raises guidance as luxury demand boosts revenue

Mercedes-Benz expects demand for its high-end models to continue to rise in the second half of the year, while Jaguar Land Rover boasted a record order book, as the luxury carmakers shrugged off the prospect of looming recessions in the US and Europe. Mercedes said on Wednesday it now expected 2022 revenues to be "Significantly above" last year's and earnings before interest and tax to be "Slightly above" the €16bn it reported in 2021, as it beat expectations in the second quarter. Auto profit margins were likely to be 12 to 14 per cent, the company added, compared with more than 13 per cent last year, but it warned that the global economy was "Characterised by an exceptional degree of uncertainty" that could further affect the supply of energy and raw materials. The company's revenues in the three months to the end of June rose 7 per cent year on year to €36.4bn, while earnings before interest and tax rose 6 per cent to €4.6bn. "The results show a company that is in rude health," said Daniel Röska, analyst at Bernstein. Källenius said Mercedes would be able to reduce its dependence on natural gas in Germany by about 50 per cent by the end of the year, by relying more on electricity and implementing energy-saving measures.

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