Mercedes-Benz Group AG, which is a well knownGerman luxury car maker, saw net profit fall nearly a fifth in the first three months of the year because of higher costs. It seems like the heat of war between Russia and Ukraine is also effecting luxury car maker Mercedes-Benz Group. But don’t you worry! You won’t have to face suspension of gambling due to any unforeseeable situation. If you love to gamble you can visit – heat of Ukraine war
Increase in expenses are also linked to the suspension of business in Russia in the wake of the war in Ukraine.The Stuttgart-based auto maker of Mercedes-Benz branded cars and vans while speaking to media said that businessthey are expecting to face difficulties throughout the whole year, which will be impacted by the continuing shortage of semiconductors, rising raw-materials prices, time to time disruptions due to the Covid-19 pandemic, especially in China, new disturbance in global supply chains from the war.
“The geopolitical and macroeconomic conditions continue to be characterized by an exceptional degree of uncertainty, including the war in Ukraine, its impacts on supply chains, and the development of prices for raw materials and energy,” Mercedes said.
such warningsclear indicates some of the struggles faced by the luxury European manufacturers as they attempt to navigate an unprecedented succession of economic shocks that are not only complicating planning but also raising costs, gumming up production and depressing demand.
Globally all manufacturers are struggling with the same challenge which is to cope with higher costs from rising raw-materials and energy prices, the semiconductor shortage, the effects of Covid-19 restrictions on their supply chains, and now war.
In its interim report Mercedes mentioned that net profit attributable to shareholders fell to €3.49 billion in the three months ended March 31, compared with €4.29 billion the year before, resulting in a drop in earnings per share to €3.26 from €4.01 the year before.
Mercedes’s decision to suspend business with Russia after Moscow’s attack on Ukraine is also a factor, a move the company said resulted in expenses of €709 million, equivalent to $754 million.
Mercedes-Benz new car sales fell 10% to 487,008 vehicles in the first quarter “mainly due to semiconductor supply bottlenecks, Covid-19 lockdowns, as well as the war in Ukraine,” the company said in its report.
Mercedes was able to handle few of negative impacts on its earnings through currency hedging, one-off asset sales and its ability to boost revenue through higher prices and a continued shift in its model offering to more upscale, higher-priced luxury vehicles.Mercedes earnings before interest and taxes, which doesn’t include special charges and expenses, rose 11% to €5.23 billion in the quarter.
Looking forward to the full year, Mercedes largely stuck to its outlook given after the close of the 2021 business year, but warned that the months ahead will be uncertain.
“The general market risks have risen from medium to high compared to the annual report 2021,” the company said.