STUTTGART/FRANKFURT (dpa-AFX) - Despite a decline in revenue, the 40 Dax-listed companies collectively increased their profits in the first quarter of this year. While revenues fell by an average of 3.7 percent, earnings before interest and taxes (EBIT) rose by 4.4 percent compared to the prior-year quarter, according to an analysis by consultancy firm EY. The primary driver was the financial sector, which posted a record-breaking profit increase of 15.9 percent, while industrial stocks reported a mere 0.5 percent rise in earnings.
The highest quarterly profits were recorded by Deutsche Telekom (5.8 billion euros), Allianz (4.5 billion euros), and Eon (3.9 billion euros). Within the top tier of German listed companies, only Zalando and Porsche Automobil Holding reported a quarterly loss. Particularly strong profit growth was achieved by Eon, Siemens Energy, and the reinsurer Munich Re. Conversely, all automakers in the Dax suffered earnings declines.
Two worlds within the Dax
Henrik Ahlers, Chairman of the Executive Board at EY, described it as a false start to the new year, though a closer look reveals a heterogeneous picture. 'Despite the economic slowdown, the financial sector is shining with very strong figures, benefiting from the sustained high interest rate environment, favorable claims developments for insurers, and high market volatility.'
Amid a weak global economy, the difficult geopolitical and trade policy situation is causing significant pressure and losses for many traditional industrial companies. EY manager Jan Brorhilker warned of structural issues: 'The previous business model of Germany, the former world champion of exports, is no longer functioning.' He noted that China is emerging as an aggressive competitor, while costs in Germany remain too high./ceb/DP/zb
