11:34 AM, Apr 20, 2017 — German luxury car-maker BMW (BMW.DE) posted a sharp increase in its first quarter pre-tax profit on Thursday as it said that its stake in mapping service ‘HERE’ had risen in value.
Profit before tax rose 27% to 3.01 billion euros ($3.33 billion) from 2.37 billion euros in the same quarter a year earlier, the company said in a trading statement released ahead of its full financial results due on May 4.
The jump was due to a 183 million euro increase in the value of its stake in HERE after the company received new investment. Intel said in January that it had agreed to purchase a 15% stake in HERE for an undisclosed sum. Volkswagen’s Audi and Daimler, the maker of Mercedes cars, also hold stakes in the mapping company.
BMW said it had also benefited from a financial gain of 122 million euros from valuation effects while its Chinese joint venture, BMW Brilliance Automotive, contributed more to profit.
Revenue totaled 23.45 billion euros compared with 20.85 billion euros in the same quarter a year earlier, the company said. The average estimate for first-quarter revenue in a Financial Times survey is 21.88 billion, based on two analysts’ forecasts.
BMW reiterated its goal for a “slight increase” in group profit before tax and an earnings before tax (EBIT) margin in the automotive segment within the range of 8%-to-10% for 2017. In the first quarter, the EBIT margin in the automotive business was 9% compared with 9.4% in the first quarter of 2016.