Despite a decline in sales, the 40 DAX companies increased their profits overall in the first quarter of this year.
While revenue fell by an average of 3.7 percent, earnings before interest and taxes (EBIT) rose by 4.4 percent compared to the same quarter last year, according to an analysis by the consulting firm EY. The main driver was the financial sector with a record profit increase of 15.9 percent, while industrial stocks only reported a profit increase of 0.5 percent.
The highest quarterly profits were recorded by Deutsche Telekom (5.8 billion euros), Allianz (4.5 billion euros) and E.ON (3.9 billion euros). In the top league of German stock corporations, only Zalando and Porsche Automobil Holding reported a quarterly loss. Eon, Siemens Energy and the reinsurer Munich Re achieved particularly strong profit growth. All car manufacturers in the DAX had to accept declines in profits.
Two worlds in the DAX
Henrik Ahlers, CEO at EY, speaks of a false start to the new year, although a closer look reveals a heterogeneous picture. “Despite the economic downturn, the financial sector is shining with very good figures; it is benefiting from the persistently high interest rates, favorable claims experience for insurance companies and the high market volatility.”
With the global economy weak, the difficult geopolitical and trade policy situation is causing massive burdens and losses for many traditional industrial companies. EY manager Jan Brorhilker warns of structural problems: “The previous business model of the former export world champion Germany no longer works.” China is acting as an aggressive competitor, while the costs in Germany are too high.
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STUTTGART/FRANKFURT (dpa-AFX)
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