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Fiat posts record loss
MILAN, Italy (Reuters) -- Fiat posted a 4.26 billion-euro net loss for 2002 on Friday as one-off items drew a line under the industrial group's worst-ever year and cleared the decks for new management to focus on a turnaround plan.
Fiat also said its board had approved a five billion-euro capital increase for its struggling car arm which would be carried out within 18 months. Of that total, Fiat would provide Fiat Auto with three billion euros immediately, it said. In a statement of results, Fiat said writedowns, the costs of restructuring its ailing car arm and capital losses on debt-cutting sales of assets like its stake in General Motors totalled 862 million euros. In the fourth quarter alone, Fiat's net loss totalled 2.98 billion euros. Fiat said it made an operating loss of 762 million euros in 2002 compared with a profit of 318 million euros in 2001 but the group broke even on an operating level in the fourth quarter, as previously forecast by analysts. Fiat's sputtering car unit, the core of the group's problems and the centre of a costly restructuring, posted an operating loss of 180 million euros for the fourth quarter, pushing its full-year loss to 1.34 billion euros, its worst ever result. Fiat said the board had also approved Umberto Agnelli, the head of the company's controlling family, to take over as chairman from Paolo Fresco, who announced the change on Tuesday. Giuseppe Morchio, a former top executive at tyres-to-cables group Pirelli, was named Fiat's fourth chief executive in nine months after being nominated by Agnelli on Wednesday. Revenue at Fiat Auto was flat year-on-year at 5.71 billion euros in the fourth quarter for a full-year total of 22.15 billion euros, down 9.4 percent. Analysts had forecast full-year turnover of 21.68 billion euros. At group level, fourth-quarter sales were also flat at 14.91 billion euros for a 2002 total of 55.65 billion -- about 5.4 percent of Italy's gross domestic product. Shortly after the results came out, Fiat shares were trading more than four percent lower at 7.15 euros. Fiat said its net debt stood at 3.8 billion euros at the end of the year after Fiat sold a rash of assets including an almost six percent stake in GM. Fiat is widely expected to sell aviation unit Fiat Avio and insurer Toro to raise up to four billion euros to pump into Fiat Auto, which is 20-percent owned by GM. In the statement, Fiat said it would close the sale of Fiat Avio soon and that it had received offers for Toro. "We expect binding offers for both companies by the end of the first half," Fiat said in the statement, adding it should book the cash from the sales by the end of the third quarter. Outgoing Fiat CEO Alessandro Barberis, Chief Financial Officer Ferruccio Luppi and Fiat Auto CEO Giancarlo Boschetti were due to hold a conference call with analysts at 1600 GMT. Agnelli, who took over as the family leader after his brother and Fiat patriarch Gianni died last month, was not expected to take part in the call.
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