After a tough opening nine months, Fiat Auto was always going to have a difficult 1999. But the final numbers were better than expected.
Analysts expected Fiat to report an operating loss of A170 million for the full year. Instead, it closed the year with an operating loss of A121 million.
The improvement was due to a substantial turnaround in the final quarter.
In the first nine months, Fiat posted a loss of A318 million. But boosted by the arrivals of the new Fiat Punto and Lancia Lybra, Fiat reported an October-December operating profit of A197 million. That compares with a loss of A128 million in the same period of 1998. Fiat's last quarter to record an operating profit was April-June 1998.
Fiat has not yet announced its net result for 1999. But given that last year's operating loss was 12 percent higher than 1998's, its net loss is expected to be around A300-350 million. That compares to a net loss of A293 million in 1998.
The outlook for 2000 is more promising. Fiat entered the new year on the back of an operating profit of 3 percent of sales in the final part of 1999. By contrast, it entered 1999 burdened by an operating loss of 2.2 percent of sales in the final part of 1998.
Fiat has not yet made any firm predictions about its financial performance in 2000. But in late 1999 Managing Director Roberto Testore predicted a 'substantial operating profit' for the entire year. Testore also said Fiat would return to net profit - although it would probably be just a symbolic amount.
Fiat's 1999 revenues fell 3 percent to A24.1 billion from A24.9 billion in 1998. But revenues were up 10 percent in the final quarter to A6.48 billion. Unit sales declined about 4 percent to 2.4 million units from 2.5 million units the year before. Production numbers have not yet been released.
A huge reorganization of Fiat's Brazilian subsidiaries resulted in a reduction of the total work force from 93,514 in 1998 to 82,450 last year. Investments rose 6.6 percent to A1.46 billion, and research and development expenses climbed 16.9 percent to A711 million.