Sixt reports third quarter profit decline - Car Rental News
Sixt reports third quarter profit decline
Car Rental News - 27/11/2008
The German rental car company has cut its full-year profit forecast after a third quarter net income drop of 23 percent.
Germany’s largest car hire firm explained that the disappointing third quarter results were largely related to increased financing costs.
Pre-tax profits for 2008 are expected to be approximately 100 million euros, down from its August prediction of 125 million for the year, the company revealed in a statement released late in the week. This would be a decline of 27 per cent over last year.
“The only problem I see now is that banks are not willing to lend at reasonable rates,” said Erich Sixt, the CEO of the firm, during a conference call. In the first nine months of this year, the company increased its fleet size to 72,000, compared to the 62,700 cars in the fleet during the same period last year.
European rental car operators are seeing reduced customer demand and higher fleet costs, as the economy in Europe continues to slow and banks tighten lending.
Sixt is not planning to cut jobs at this time, according to its CEO. He did say, however, that the size of the fleet may be adjusted depending on customer demand – and that vehicles may be used more frequently. “I have lower costs with fewer cars on the road,” Sixt said. “I have more revenue when they are used more often.”