Sixt faces no more hurdles in boosting profits - Trouble persists with Sixt's profits remaining elusive
Sixt Sees Significant Profit Surge in First Half of 2023
Car rental company Sixt has reported a substantial profit surge in the first half of 2023, marking a significant recovery from the challenges faced in the previous year. The company earned nearly 66 million euros after taxes, more than double the previous year's result.
The profit growth can be attributed to several key factors. Sixt saw a 71% increase in earnings before taxes (EBT) compared to the previous year’s second quarter, driven by robust revenue across all segments and increased fleet utilization.
The company enhanced profitability by growing and modernizing its fleet, especially with a higher share of premium vehicles. This strategy helped capture higher rental prices and meet rising customer demand. Sixt also expanded its presence in the US market, acquiring 10 major airport stations and laying the foundation for substantial growth in North America.
Cost management and operational efficiency also played a significant role in Sixt's profit surge. The company handled fleet holding costs better and improved margins despite the challenging market environment.
However, it's important to note that the profit surge is not solely due to better purchasing conditions but also the resolution of last year's used car problems. Weak used car prices, which resulted in lower revenue from the resale of rental cars, were a problem for Sixt last year but have been resolved. The company sold the last affected vehicles from last year in the first quarter of 2023.
The rental fleet grew in the second quarter, averaging 197,800 vehicles, which is almost six percent more than in the same period last year. Despite the leaner fleet in the USA due to high market uncertainty, the business in the USA is stable, with around two-thirds of it being done directly with Americans.
Chief Financial Officer Franz Weinberger praised the results, despite the challenging market environment and uncertain times. Sixt's profit in the unencumbered second quarter of 2023 was approximately 78 million euros. The group paid 92 million euros in insurance costs in the first half of the year, an increase from the previously stated 75 million euros.
In conclusion, Sixt's profit surge in the first half of 2023 is a testament to the company's strategic expansion, operational improvements, and the resolution of last year's used car problems. The company looks poised for continued growth in the second half of the year.
The strategic expansion of Sixt, particularly in the US market, and the resolution of last year's used car problems are crucial contributors to the significant profit surge in the first half of 2023. This growth is expected to continue in the second half of the year as the company leverages industry-specific policies, such as its community policy and employment policy, to maintain operational efficiency and cater to customer demands in sectors like finance, transportation, and the automotive industry.
