Italian carmaker Fiat said it expected to boost trading profit in 2010 if car incentives were renewed, as it beat forecasts for fourth-quarter trading profit today.
Fiat, which owns 20 per cent of US carmaker Chrysler, posted group trading profit of €488 million in the fourth quarter, the company said in a statement. Revenues rose 3.6 per cent to €13.6 billion.
Fiat is the first of the major European car makers to report results for 2009, a year when sales globally were supported by incentives from governments on new car sales. Those incentives are expected either to expire this year or be cut.
Fiat's own consensus of analyst forecasts pegged fourth-quarter trading profit at €460 million. Trading profit is operating profit before extraordinary items.
Chief executive Sergio Marchionne said last week that results would be better than the average of consensus estimates.
The group said that in 2010 - "a transitional and stabilisation year" - the group's business would grow with the exception of the core auto business which depended on eco-incentives being reintroduced.
Fiat said trading profit with incentives in 2010 is expected to be around €1.5 billion while revenues will grow 3-6 per cent to €52-53 billion.
If car incentives are not maintained Fiat trading profits for the auto and spare parts business would fall by €350-400 million, it said.
Fiat said it sees net debt under €5 billion in 2010 from the net industrial debt of €4.4 billion end-2009.
Rating agency Moody's does not see any need for Fiat to issue a bond this year given its high liquidity and access to bank facilities to cover maturing debt.
At 1148 GMT Fiat shares were up 1.11 per cent at €10.01 while the DJ Stoxx Auto index was down 0.21 per cent.
Reuters