DAIMLER-BENZ is now on course to announce a profit for the first half of the year, marking the start of a climb-back from 1995 when escalating aerospace losses, worsened by the cost of closing Fokker, had left the German giant nursing a massive deficit.
While Daimler-Benz confirms that it is expecting an overall profit, to be revealed formally at the end of August, it declines to confirm German reports that the half-year figure will be close to DM700 million ($475 million) and that full-year profits could reach DM2 billion.
The group ended 1995 with a net loss of DM5.7 billion, of which Daimler-Benz Aerospace (DASA) contributed more than DM4 billion. The group confirms that DASA will still turn in an overall loss for the first half, but is expected to end the year with a substantially lower deficit of around DM480 million.
The prediction is in line with the group's forecast in April, which was issued to soothe market fears in the wake of the massive losses.
DASA has been helped, by the strengthening of the US dollar, against the deutschemark this year. When the company launched its "Dolores" plan in 1997 to cope with crippling currency losses, it based the recovery on a pessimistic rate of DM1.35 to the dollar. This year the rate has been hovering above DM1.5. The plan aims to take DASA towards break-even in 1997 and into profit by 1998.
Source: Flight International
