From carmaking to media and construction, family businesses around the world are seeing significant growth in revenues and profit, with the Moller-Maersk Group, BMW and MasTec all reporting good results. But things aren't looking as bright for family-controlled commodities trader Louis Dreyfus.
In its first ever published results on 14 November, Louis Dreyfus Commodities, the trading arm of Louis Dreyfus Group and one of Europe’s largest family businesses, said its net profit for the six months to end of June dropped 20% to $356 million (€279.5 million), down from $448 million for the same period in 2011. Revenues fell to $27.6 billion from $29.3 billion. The Dutch group, controlled by family member Margarita Louis-Dreyfus, blamed the results on higher costs at its Brazilian sugar unit.
In contrast, fellow European family business Hermes, known for its silk scarves and Birkin bags, reported a rise in sales. Sales grew by 24.2% at current exchange rates to €848.6 million in the third quarter, while turnover for the nine months hit €2.4 billion – a 22.7% rise. In a statement on 8 November, the 175-year-old company, which is around 70% controlled by descendants of founder Thierry Hermes, reported particularly strong sales in its ready-to-wear division.
AP Moller-Maersk Group, the world’s largest shipping company, also posted a strong set of results for the third quarter with net profit hitting 5.6 billion Danish kroner (€750.8 million) – a 191% increase from 1.92 billion Danish kroner last year. The profit increase was largely credited to a one-off settlement of a tax dispute. Third-quarter revenues at the Copenhagen-based group grew 8% to 87.2 billion Danish kroner.
Controlled by the Mc-Kinney-Moller family, the group forecasted its full-year profit to be $3.7 billion, slightly above its 2011 result.
German carmaker BMW, controlled by the Quandt family, also had a good third quarter. Sales rose 13.7% to €18.82 billion, with net profit increasing 16% to €1.29 billion. For the nine-month period ending 30 September, revenue and net profit increased 11.6% and 16%, to €56.3 billion and €1.3 billion respectively.
The Munich-based company credited the strong gains on increased sales of its BMW, Mini and Rolls-Royce cars.
“We achieved new record performances in terms of sales, revenues, pre-tax result and group net profit,” said chairman Norbert Reithofer in a statement.
Across the Atlantic, media conglomerate News Corp, headed by Rupert Murdoch, saw profits more than triple to $2.23 billion in its first quarter – up from $738 million reported a year ago. In a statement last week, the group said the rise was partly due to the sale of its stake in software company NDS. Revenues at the company increased slightly to $8.14 billion – from $7.96 billion in 2011.
Meanwhile, family-managed telecommunications and construction company MasTec had a record-breaking third quarter with revenue reaching $1.1 billion – up from $816 million – while operating profits hit $101 million compared to $77 million for the same period last year.
The company, which is controlled by the Mas family, also announced plans to sell its municipal water and sewer business, which has struggled in recent years.
But in Canada, two family businesses posted less than positive results. Train and plane-maker Bombardier saw sales for the three months ending 30 September fall, albeit marginally, to $4.3 billion from $4.6 billion the year before. However, net income rose to $212 million from $192 million.
Likewise, family-controlled dairy company Saputo saw revenues slip 2.6% to Can$1.7 billion (€1.4 billion) from Can$1.79 billion, due to a slowdown in sales worldwide. However, the weakening of the Canadian dollar against the US dollar helped profits increase by 2% to Can$129.7 million.
The Montreal-based company, which last year appointed a non-family member as president of the group, is the world’s 12th-largest dairy processor with more than 10,200 employees.
Elsewhere, Japan’s Toyota posted strong results on 5 November following a tough 2011. Revenues for the second quarter jumped 18.2% to 5.4 trillion yen (€53 billion), while operating profits tripled to 257.9 billion yen – a 220% increase, credited to recovery following the earthquake.
Revenues for the six months to 30 September rose 36% to 10.9 trillion yen.
But the company, which is controlled by members of the Toyoda family, announced a global recall of 2.7 million cars on 14 November, because of problems with the steering wheel and water pump system – which could hit the next quarter’s results.
Finally, family-controlled Chow Tai Fook, which had revenues of HK$35.04 billion (€3.54 billion) last year, warned that profits for the six-month period to September would be lower than last year due to an increase in the price of gold.