Fiat changes name; profit drops

 30 Jan 2014 - 9:08


MILAN: Italian car giant Fiat announced yesterday it was changing its name after completing the purchase of US automaker Chrysler to “Fiat Chrysler Automobiles”, but posted disappointing 2013 results.
Fiat chairman John Elkann said the name change heralded “a new chapter”.
“A journey that started over a decade ago, as Fiat sought to ensure its place in an increasingly complex marketplace, has brought together two organisations each with a great history in the automotive industry and different but complementary geographic strengths,” he said.
“FCA allows us to face the future with a renewed sense of purpose and vigor,” he added.
The group statement said: “In order to establish a true peer to the major global automotive groups, in both scale and capital market appeal, the Board has decided to establish Fiat Chrysler Automobiles NV, organised in the Netherlands, as the parent company of the Group.”
The company said shares would be listed in New York and Milan and Fiat shareholders would receive one FCA common share for each Fiat share they hold. FCA will be resident in the UK for tax purposes.
“Today is one of the most important days in my career at Fiat and Chrysler,” Fiat CEO Sergio Marchionne was quoted as saying.
“We have worked tenaciously and single-mindedly to transform differences into strengths and break down barriers of nationalistic or cultural resistance,” he said.
The FCA will “continue with the same mission, including manufacturing plants in Italy and elsewhere around the globe, with no impact on head-count,” said the group, calming concerns that the car maker would abandon Italy. The group said it expected to present a long-term business plan at the start of May 2014.
However, earlier yesterday Fiat reported 2013 results which were below analysts expectations and said it would be waiving dividends, causing shares in the group to plummet.
The carmaker reported a trading profit of ¤931m ($1.27bn) for the fourth quarter of 2013, less than the ¤1.5bn forecast by analysts.
It also cut its 2014 forecast more than expected, to between ¤3.6 to ¤4bn — down from a previous estimate of up to ¤5.2bn .
Subsequently, the board of directors “has decided not to recommend a dividend payment on Fiat shares, given the company’s desire to maintain a balanced level of liquidity following the acquisition of the minority stake in Chrysler Group LLC,” the company said in a statement.