Surprise as Fiat Chrysler net profit falls by forty percent

Italian-American carmaker Fiat Chrysler Automobiles (FCA) said on Wednesday it made a net profit of €377 million ($410 million) last year, a 40 percent drop from 2014.

Surprise as Fiat Chrysler net profit falls by forty percent
Photo: Giuseppe Cacace/AFP

The figure was way below the €539 million profit expected by analysts.

But sales, including those of luxury sports car unit Ferrari, raced ahead by 18 percent to €113.2 billion.

The group, which spun off Ferrari on January 4th, expects sales to rise this year from the €110 billion it booked in 2015 excluding Ferrari.

It said it expects operating earnings (adjusted earnings before interest and tax) to rise above €5 billion in 2016 from the €4.79 billion registered in 2015.

Adjusted net profit is seen as rising to €1.9 billion from €1.7 billion in 2015.

FCA shares fell 1.8 percent on the Milan stock exchange, which was down 1.2 percent in midday trading.

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Fiat promises no job cuts in return for state aid: report

Fiat Chrysler has agreed to the conditions laid down for a state-backed €6.3 billion euro loan, including a promise not to relocate or cut jobs, Italy's Sole 24 Ore daily said Sunday.

Fiat promises no job cuts in return for state aid: report
Robots manufactured by Comau are pictured on the assembly line of the Fiat 500 BEV Battery Electric Vehicle. Photo: AFP

The state auditor has approved the guarantee, but it still needs to be signed off on by the economy ministry, the paper said.

The request for state support on such a large loan has proved controversial, particularly with the company's corporate headquarters in Amsterdam.

FCA — which directly employs close to 55,000 people in Italy — has said the loan is essential to help the group's Italy operations and the whole industry to weather the crisis triggered by the coronavirus pandemic.

The company will commit to investing 5.2 billion euro in Italy on new and existing projects, and up to 1.2 billion euro on its 1,400 or so foreign suppliers, said Sole 24 Ore, Italy's financial newspaper.


FCA will also pledge not to cut any jobs before 2023.

The loan will be funded by Italy's largest commercial bank Intesa San Paolo and 80 percent guaranteed by export credit agency SACE, the daily said.

The government has said FCA would face sanctions if it failed to stick to the conditions laid down for loan. Sole 24 Ore said the fine for breaking the agreement could be in the region of 500 million euros.