German blue chips post higher profits despite car industry slump

Germany's biggest listed companies recorded higher profits in the third quarter despite continued weakness in the country's struggling car industry, according to an analysis by consulting firm EY.

The 40 companies in Germany's benchmark DAX index reported combined earnings before interest and taxes (EBIT) of around €37.7 billion ($41.7 billion), up 4.6% or about €1.7 billion from a year earlier.

Combined revenue, excluding banks, rose 4.5% to around €460.5 billion, although performance varied significantly across sectors.

Energy companies RWE and Siemens Energy, along with defence manufacturer Rheinmetall, recorded double-digit revenue growth. By contrast, sales fell sharply at carmakers Volkswagen, BMW and Mercedes-Benz, as well as tyre manufacturer Continental.

"The automotive industry remains under considerable pressure and clouds the overall picture," said Henrik Ahlers, head of EY Germany.

Thousands of jobs are at risk in the sector, with factory closures also looming.

Companies in other sectors are also cutting costs. The 28 DAX companies that disclosed employment figures had a combined workforce of just under 3.2 million at the end of September, down around 49,400 or 1.5% from a year earlier, EY found. Thirteen of those companies reduced their workforce.

Despite the challenges, Ahlers pointed to signs of renewed investment, particularly in energy, infrastructure, defence and technology.

Deutsche Telekom reported the highest quarterly operating profit at €7.4 billion, followed by Allianz with €4.7 billion and Siemens with €3.3 billion.

Overall, 27 companies increased their profits, while 10 reported declines. Volkswagen posted the biggest quarterly loss at more than €5.8 billion.