Group completes turnaround phase and moves to expand - The Fiat group last year posted a net profit of 2.054 billion euros which was more than double its profit in 2006, a company statement said on Thursday.
The group in 2007 was able to level its industrial debt thanks to a strong cash flow which also allowed it to buy back its own shares for a value of 400 million euros.
The group's trading profit in 2007 hit an all-time high of 3.233 billion euros, while turnover jumped 12.9% to 58.5 billion euros.
Based on last year's results, Fiat has confirmed its targets for 2008, which include a turnover of over 60 billion euros and a further buy-back of shares, despite an expected downturn for the world economy.
''The targets for 2008 are based on the assumption that the current turbulence on financial markets will have limited repercussions on the real economy and, in a worse case scenario, be limited to the United States,'' according to a joint statement from Fiat Chairman Luca Cordero di Montezemolo and CEO Sergio Marchionne.
''The group believes it is improbable that the confidence crisis on capital markets will spread and lead to a significant decline in consumer spending,'' the statement added.
''Nevertheless, should such a scenario occur, the group is convinced it will be able to absorb the impact of a drop in demand,'' Fiat's top brass said. The trading profit for Fiat Group Automobiles was 803 million euros, almost three times what it was last year thanks to an increase of 512 million euros.
Sources at Fiat said the jump in the group's earnings was due to the success of the new models introduced by Fiat Group Automobiles which sold a total of 2.2 million vehicles in 2007, the most since 2000, which allowed for a turnover of 26.8 billion euros, an increase of 13.1% over 2006.
Ferrari saw sales climb by 12.3% over 2006, with gross earnings up 15.3% to 1.6 billion euros, while trading profit leapted 45.4% to 266 million euros Turnover for Fiat's farm and earth moving vehicle division CNH climbed 12.8% thanks to a higher volume of sales.
Fiat' industrial vehicle division Iveco last year saw sales climb by 16.6% to 211,700 vehicles, the highest ever, with turnover up 22.5% to 11.2 billion euros.
News in Milan of Fiat's record performance in 2007 sent the group's shares up by more than 8%.
In their report on last year's results, Montezemolo and Marchionne defined 2007 as a ''crucial year'' for the group for three basic reasons.
The first was that Fiat was able to complete the industrial turnaround plan it presented to stockholders in July 2004, and in some cases exceed expectations and targets.
The second was that the group erased its industrial debt and can now expect rating agencies to hike Fiat up to ''investment grade''.
The third was that ''Fiat was able to embark on an expansion and growth plan for 2007-2010 which will transform it into a major international business.
