Fiat reports 4Q loss on declining truck sales; seeks continued eco-incentives

Fiat reports 4Q loss

MILAN — Fiat Group SpA, controlling stakeholder in Chrysler LCC, on Monday reported a fourth-quarter loss of €281 million ($397 million) due to a sharp decline in truck and construction equipment sales.

The company urged a continuation of European cash-for-clunker incentives to help the stabilize the industry from a tumultuous year.

The quarterly loss compares with a net profit of €163 million in the same period a year earlier.

Full-year losses totaled €838 million, compared with earnings of €1.6 billion for all of 2008.

Fourth quarter revenues at the company that makes autos under the Fiat, Maserati and Ferrari brands, as well as trucks and farming equipment, were up 3.5 percent to €13.6 billion compared with €13.1 billion a year earlier. Full-year revenues were €50.1 billion, down 16 percent compared with €59.6 in 2008.

Fiat shares were trading up 0.20 percent at €9.92 on the Milan Stock Exchange.

Revenues for Fiat Group Autos, which includes the Lancia, Alfa Romeo and Fiat brands, were boosted by cash-for-clunkers incentives in key European markets to €7.2 billion, which Fiat says were the auto business’s highest-ever fourth quarter revenues. That compares with €5.7 billion in the same quarter a year earlier.

Fiat’s small car, low-consumption engine technology benefited from the scrapping incentives, particularly in Italy and Germany.

Trading profit, or earnings before interest, taxes and one-time gains or costs, declined to €488 million euros from €663 million euros in 2008. Net industrial debt was reduced to €4.4 billion, from €5.9 billion at the end of 2008 due cost cutting and “significant’ destocking of all businesses, while the automaker increased its liquidity to €12.4 billion from €3.9 billion at the end of 2008.

Trading profit for the year was €1.1 billion — beating the company’s own guidance of above €1 billion.

“After a particularly difficulty 2009, with uneven trading conditions across the group’s international scope of operations, 2010 is positioning itself as a year of transition and stabilization,” Fiat said in a statement.

Fiat said 2010 revenues are expected to grow 3 percent to 6 percent in 2010, with trading profit of €1.5 billion and net debt levels below €5 billion — but said the targets are dependent on the scrapping incentives in the European markets. Germany has already opted out, but Italy, Fiat’s biggest market, has not yet committed to continuing the schemes.

Fiat forecast demand in Italy, where Fiat has a 30 percent market share, alone will drop by 20 percent if the incentives are dropped.

In that case, Fiat said revenues would decline by €2.5 billion and trading profit for the automobile and components businesses would drop, ballooning debt above €5 billion.

Fiat also said it intended to resume distributing dividends, paying out an aggregate of €244 million.