Mercedes prepared to cut gas use

Mercedes-Benz expects a significant rise in revenues and slightly higher earnings in 2022 on the back of strong vehicle prices and model mix even as the company warned of economic turbulence due to Europe’s worsening energy crisis, high inflation and protracted supply-chain problems.

The company on Wednesday raised its outlook after an 8 percent jump in second-quarter adjusted earnings to 4.9 billion euros ($4.97 billion). Mercedes had previously said it expected only slightly higher revenues this year and earnings equal to last year.

Still, uncertainty due to the war in Ukraine, high inflation, interest rate rises, and the pandemic, particularly in China, could all weigh on the business, Mercedes said.

“We are enhancing our vigilance and resilience to manage increasingly complex macroeconomic and geopolitical challenges,” CEO Ola Kallenius said in a statement. “At the same time, we have good reasons to remain confident, with ongoing strong demand, a fresh vehicle portfolio and further key product launches this year.”

In the latest quarter, Mercedes saw an adjusted return on sales of 14.2 percent in the Mercedes-Benz Cars division, up from 12.8 percent in the same quarter last year, while returns in its vans division fell slightly to 10.1 percent from 11.4 percent last year.

Looking forward, it raised its expected adjusted earnings margin for its cars division in the second half to 12 percent to 14 percent from 11.5 percent to 13 percent previously.

The first half saw a 15 percent margin but higher material costs, research and development spending and effects from the used car market could weigh on the second half, the company said.