BMW's 2008 profit falls 90 per cent

FRANKFURT (AP): German carmaker BMW AG said Thursday its net profit fell 90 percent in 2008 as the global economic crisis cut into demand for its sports and luxury cars.

In an unexpected preliminary earnings release, the Munich-based company said its net profit for the full year dropped to euro330 million ($416 million) in 2008 from euro3.1 billion in 2007.

Total revenues fell 5 percent to euro53 billion from euro56 billion in 2007.

BMW said in addition to the weak car markets in 2008, the company was affected by euro2.4 billion in costs to cover bad debts, one-time personel costs and provisions to cover risks on used car markets.

The company, which is scheduled to release its full earnings report on March 18, did not provide fourth quarter 2008 figures.

BMW also didn't provide an outlook for the full year, though the management made an effort to reassure its investors.

``The BMW Group has been able to make improvements at an operating level in the midst of extremely difficult economic times,'' Norbert Reithofer, BMW's chief executive said in the release.

``Cost structures have been further optimized, and thanks to rigorous management of free cash flow, the BMW group is in a very solid financial position.''

BMW said earnings before interest and taxes, a measure of operating profit, fell 78 percent to euro921 million from euro4.2 billion in 2007.