BMW profit down as VW sinks into DM2bn loss

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The Independent Online
THE contrasting fortunes of two of Germany's leading car makers were illustrated yesterday as BMW reported a 1993 profit of DM516m ( pounds 205.5m) while Volkswagen announced it had tumbled from a DM71m profit in 1992 to a net loss of DM1.9bn.

Both declared an unchanged dividend - BMW of DM12.5 and VW of DM2. BMW, due to complete the acquisition of Rover this week, also announced a one-for-eleven rights issue to raise DM768m.

The heavy losses at VW were expected, though not as bad as the DM2.3bn forecast last December. Despite remaining profitable, BMW did not emerge entirely unscathed from the severe downturn that hit the German car market last year. The DM516m group profit compared with DM762m in 1992.

Parent net profit was unchanged, however, at DM452m. BMW shares jumped on the news to DM860. But this was still DM10 down on the day.

Separately, the company said it would also propose four new members to the supervisory board to replace Klaus Barhelt, Wolfgang Leeb, Kurt Werner and Kurt Wessing, who are all retiring.

Among the new board members proposed are Wolfgang Roeller, chairman of Dresdner Bank's supervisory board, and Lodewijk van Wachem, chairman of Royal Dutch Petroleum.

VW said its supervisory board planned to delay exoneration of the former head of its Spanish unit Seat. The actions of German management board and supervisory board members are normally routinely approved at shareholder meetings, on the recommendation of the supervisory board.

But the board can withhold a recommendation, or propose that the approval be delayed, if it suspects that the person or people concerned have not acted in full accordance with normal business practices.