CEO Helmut Panke: BMW will try in 2005 to equal its record 2004 net profit.
Stefan Krause, BMW's CFO, warned that the weak dollar will have a far more negative impact on BMW earnings in 2005 than it did in 2004.
"We have entered strategic currency hedging transactions for the year 2005 that will cover more than 50 percent of the currency volume," Krause said earlier this month in Munich, Germany.
"However, the exchange rates are not as favorable as in 2004. Therefore, the impact on earnings will be far more negative than in the last business year."
BMW CEO Helmut Panke said BMW would try in 2005 to equal its record $2.94 billion net profit reached in 2004.
John Lawson, analyst for Citigroup Smith Barney in London, said currency pressure will be substantial.
"We've documented an 800 million euro (about $1.05 billion) exchange-rate head wind for 2005, and you have to add onto that 100 to 200 million euros (about $131.7 million to $263.4 million) in raw-material negatives," he said.
"That's what they have to overcome.
"Their industrial franchise will grow substantially during 2005. We've assumed they'll grow around 9 percent in terms of units. But earnings won't follow that because of strong head winds."
In 2004, for the first time, the BMW brand surpassed 1 million units worldwide with sales of 1.02 million units, Panke said.
Total 2004 sales of BMW, Mini and Rolls-Royce brands were more than 1.2 million units worldwide, up 9.4 percent from 2003.
You may e-mail Bradford Wernle at [email protected]