Many German stock market heavyweights are in top form at the beginning of the year. However, the prospects have clouded over significantly.
Germany’s stock market heavyweights defied supply bottlenecks and the first economic consequences of the Ukraine war at the beginning of the year. Overall, the Dax companies achieved record sales and profits in a first quarter, according to an evaluation by the auditing and consulting company EY.
Accordingly, the turnover of the Dax companies without banks increased by 14 percent compared to the same period last year to a record value of 444.7 billion euros. Operating profit (EBIT) improved by 21 percent to a total of 52.4 billion euros. That was also the highest profit ever measured in a first quarter.
“So far, Germany’s top companies have been able to absorb the effects of the various crises remarkably well – many have completed the best first quarter in their history and have proven to be very resilient,” explained Henrik Ahlers, CEO of EY. However, the good figures should not hide the fact that the German economy is vulnerable. The risks for the economy have increased further as a result of the Ukraine war and the upheaval in the supply of energy and raw materials. “Germany as an industrial location faces the great challenge of avoiding serious consequences for industry when gas and oil supplies are shifted.”
Volkswagen at the top
In the period from January to the end of March, the corporations from the top German stock exchange league, the Dax 40, once again made excellent money. According to the information, the Volkswagen car group was at the top with an operating profit of 8.3 billion euros, followed by Deutsche Telekom (6.3 billion) and Mercedes-Benz (5.2 billion). Bayer came fourth with 4.2 billion euros, followed by BMW (3.4 billion).
Business was boosted primarily by the strong economic recovery in the USA. In North America, total sales increased by 19 percent. On the other hand, Asia, as the sales engine for German companies, slowed down in the first quarter with an increase of 8 percent. “The tough lockdown measures in China are increasingly proving to be a problem for the entire global economy. We will still feel the effects of these lockdowns, »expects EY partner Mathieu Meyer. In his estimation, the prospects for the coming months have clouded over. «Because the effects of the increased energy and food costs are increasingly being felt in private consumption. In addition, purchasing power in the USA is falling due to the rapid rise in interest rates.”