TROLLHATTAN - Saab Automobile AB says it has turned the corner after three years of losses.
Though losses grew in the first half of 1998, Saab says it will operate at a profit for the rest of year thanks to new products and improved sales in Europe.
Saab expects to show a net loss for the full year but be profitable for all of 1999. Saab hasn't reported a quarterly profit since 1995.
Pretax losses rose to SKr978 million ($122 million) in the first half of 1998, from SKr600 million in the same period last year. The net loss widened to SKr1 billion from SKr634 million last year. But sales revenue rose 18 percent to SKr13 billion as unit car sales grew.
Higher losses in the first half were blamed on a Danish national strike that cost a week of production in early May. Saab also cited the costs of launching the new 9-3 worldwide and the 9-5 in the USA.
'With these launches behind us now, we anticipate substantial movement,' said Robert Hendry, Saab president. 'Although 1998 overall will be at a net loss, we expect to operate at a profit for the balance of the year.'
The improved outlook reflects strong demand for the new models. Retail sales rose more than 14 percent to 58,077 cars in the first half. Growth in Europe has been particularly strong. Sales rose 65 percent in France and 55 percent in Germany in the first half
Sales in North America were constrained by supply shortages. Through July, US sales were down 4 percent to 15,977 units.
Saab is jointly owned by Swedish investment group Investor AB and General Motors.