Business in China drove Daimler's profits to unimagined heights

A flourishing business in China and cost reductions drove Daimler's profits in the first quarter to unimagined heights. The operating result before interest and taxes (EBIT) rose to 5.75 billion euros, as Daimler announced in the night. That was more than nine times the profit in the first quarter of 2020, when the Stuttgart-based carmaker earned just 0.62 billion euros after the outbreak of the corona pandemic. Analysts had expected the group for the first three months of the year just under five billion euros in EBIT. "In a very positive market environment, we are continuing to implement our strategy consistently," said CEO Ola Källenius. "At the same time, it becomes clearer how hard we are working to lower the company's breakeven point." The strong demand had a positive effect on the prices that Daimler was able to enforce with customers. The product mix has changed towards more lucrative models. Daimler had reported a 22 percent increase in car sales for the first quarter, and sales soared by 60 percent in China alone. Nevertheless, the automaker surprised the experts, especially in the business with cars and vans. In the largest segment, Daimler alone earned 4.1 billion euros before interest and taxes, eight times as much as a year earlier and a good half billion euros more than the analysts expected on average. The division's adjusted return on sales reached 14.3 percent. This results in sales of 26.9 billion euros, 16 percent more than in the first quarter of 2020. Even in the truck and bus business, significantly more remained than a year ago, despite a slight decline in sales. The EBIT quadrupled to 1.04 billion euros (2020: 0.25) and thus met the forecasts. As in the previous year, sales were around EUR 8.6 billion. Källenius wants to split off the truck division and put it on the stock exchange separately. The Mobility service division contributed 744 million euros (2020: 58) to the result, a little more than expected.