BRUSSELS -- Belgium's largest car seller D'Ieteren on Thursday reported a more than 10 percent skid in 2002 earnings and forecast flat results this year as a slowdown in demand for new cars puts the brakes on profits.
Its shares rose, however, as analysts approved of the company's cautious outlook. D'Ieteren, which owns 59 percent of Europe's largest car rental firm Avis Europe, said the outlook was uncertain for its three main businesses -- car rental, car sales and glass repair.
"In light of the trends in the three business sectors, the results of the D'Ieteren group in 2003, without an international conflict and/or a significant worsening of the economic context, should be similar to those for 2002," D'Ieteren said.
D'Ieteren, exclusive distributor of Volkswagen, Audi, Rolls-Royce and Porsche cars in Belgium, has been suffering from falling car sales as the economic slowdown has crimped demand for new cars.
"They are being realistic," said KBC Securities analyst Marc Leemans, who has an "accumulate" rating on the stock. "Vehicle distribution in Belgium is expected to contract and they will have to cut costs there to keep up profits."
D'Ieteren also forecast flat operating profit at its retail business. In 2002, the unit suffered a 31 percent fall in operating profit to 52.8 million euros.
Its shares were up 1.7 percent at 105.70 euros in early trading, versus a lower Belgian market. They earlier reached as high as 106.50 in almost half the company's daily volume by 0850 GMT.
For 2002, D'Ieteren said its net current profit fell more than 10 percent to 105.9 million euros, beating expectations of 91.77 million in a Reuters poll of six analysts.
Sales were down eight percent to 3.1 billion euros, matching expectations of 3.09 billion.
D'Ieteren also reiterated its previous forecast of a five percent drop in new car sales this year to 450,000 and said it still expected to increase its market share to more than 18 percent, helped by sales of new types of vehicles such as Volkswagen's small people-mover Touran.
It forecast an uncertain outlook for its Avis Europe subsidiary with no significant economic recovery expected for 2003.
Avis also posted a steep fall in 2002 underlying profits on Thursday.
The rental company warned the threat of an impending war in the Middle East clouded its outlook, but it would maintain tight control on its fleet and staff levels to keep costs down.
D'Ieteren's shares have slid along with the car market. Since the beginning of this year, its shares have fallen about 17.7 percent, but have underperformed Belgium's Bel-20 blue chip index -- of which it is a component -- by 2.2 percent.