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Daimler-Benz 4-Mo Group Sales DM36.3 Bln, Up 15%

AP-Dow Jones News Service

STUTTGART -- German industrial group Daimler-Benz AG (G.DAI) Wednesday reported group sales in the first four months of the year rose 15% to DM36.3 billion. Comparative figures for the previous year were not immediately available.

Daimler also said it will achieve a clearly higher operating profit in 1997. In 1996, group operating profit was DM2.4 billion, following a whopping DM1.1 billion loss a year earlier.

In a press release distributed ahead of Daimler's shareholders meeting Wednesday, Chairman Juergen Schrempp reiterated Daimler expects to reach its goal of achieving a 12% return on capital employed within the next two years.

To reach that goal, group operating profit will need to at least double from 1996's DM2.4 billion.

Daimler also said it expects 'clearly higher' group sales in 1997. In 1996, Daimler's sales reached DM106.3 billion.

'Daimler is now active in (business) areas where we can achieve healthy growth from within and which are marked by high earnings potential,' Schrempp said in the statement.

In the first four months of the year, sales were up in each of Daimler's divisions.

Sales of Mercedes' passenger cars were up 14% to DM16.2 billion, Daimler said Wednesday. Those figures were slightly different from the 13% rise to DM16.5 billion released last week at the opening of Daimler's new manufacturing plant in Tuscaloosa, Alabama in the U.S.

A Daimler spokesman explained the difference was due to the fact that the first set of figures was prepared according to German accounting standards, while the most recent data was according to U.S. Generally Accepted Accounting Principals (GAAP).

Mercedes' commercial vehicle sales rose 15% to DM11.6 billion in the January through April 1997 period. The company cited 'positive developments' in truck sales in the North American Free Trade Agreement (Nafta) region and van sales in Europe. Daimler didn't mention whether sales of heavy trucks in Europe, which have been lower for the past couple of years, had improved.

Revenues at aerospace division DASA surged 39% to DM3.9 billion, due to rising sales of commercial and military aircraft, satellites and aerospace engines, Daimler said. The stronger dollar also helped lift revenues, the company said without being more specific.

At Debis, Daimler's financial services, computer software and telecommunications division, sales climbed 17% to DM4.7 billion in the first four months of the year.

Daimler said telecommunications, information technology and media services sales rose 'over-proportionally' to the division's other business units.

Sales in Daimler's directly-operated divisions, including its Adtranz rail joint venture with Swiss-Swedish group Asea-Brown-Bovery, Temic microelectronics and MTU Friedrichshafen diesel engines, were up 5% to DM1.9 billion in the four-month period.

Daimler said that in the coming months, its efforts will concentrate on improving its competitiveness on an international level, and increasing its worldwide presence.

'We must further strengthen our position and take advantage of opportunities in the growth markets of the future, mainly in Asia but also in Latin America, as well as central and eastern Europe,' Schrempp said.

However, recent reports have indicated Daimler's planned $1 billion joint venture auto plant in China has hit some problems. Daimler is threatening to pull out due to a dispute with one partner, state-run Nanfang South China Motor Corp., which wants the minivan built at two separate locations rather than the single one sought by Daimler.

Meanwhile, Daimler Wednesday said its worldwide employment was up 1% as of the end of April, to around 289,000 workers.

Analysts said Wednesday's sales figures were favorable but not surprising.

Growth in group sales was up from the 12% increase reported for the first quarter, bolstered by the stronger dollar and by two additional work days compared to April 1996, said Klaus-Juergen Melzner, auto analyst at Deutsche Morgan Grenfell in Frankfurt.

'DASA (sales) were very strong due to last year's rise in Airbus orders and the dollar,' he said, noting the favorable exchange rate helped boost car and truck sales.

DASA holds a 37.9% stake in the European Airbus Industrie consortium.

Melzner noted that, while Daimler said its operating profit is rising, the company won't release any concrete figures until August, when it publishes data for the half-year.

'We just have to wait until then, but the dollar is certainly helping,' he said.

At the end of April, the dollar was quoted around DM1.72, up over 13% from its DM1.52 notation the end of April 1996.

Daimler's share price was lifted slightly by Wednesday's figures. Around 0930 GMT, the shares were trading at DM137.20, up DM0.80, or 0.6%, from their DM136.40 close on Tuesday. The DAX 30-share index, meanwhile, was up 0.1%.

Daimler-Benz AG, a holding company with diverse operations, is Europe's largest industrial group. Its operations include the Mercedes-Benz car-and-truck division, Daimler-Benz Aerospace AG (DASA) and financial services unit Daimler-Benz Interservices AG (Debis).

In 1995, Daimler dissolved its AEG electronics subsidiary and cut off funds to its loss-making Dutch-based Fokker N.V. aircraft affiliate.

Headquarters: 70546 Epplestrasse 225, Stuttgart, Germany.

Significant developments: In January 1997, the resignation of Mercedes Chairman Helmut Werner preceded confirmation by Daimler that Mercedes would be merged back into the parent company effective April 1.

In March, Daimler announced a DM2.8 billion net profit for 1996 and a resumption in the dividend. The 1995 dividend was omitted after Daimler posted a DM5.7 billion net loss, due largely to DM5 billion of charges for its aerospace and AEG electronics divisions.

Sales revenues rose 12% in the first three months of the year to DM26 billion. In the first four months of 1997, sales were up 15% to DM36.3 billion.


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