The top executives of Fiat Chrysler Automobile N.V. delivered an upbeat assessment of the company’s future prospects during the company annual shareholder meeting in Amsterdam, agreeing to pay a dividend to shareholders for the first time since Fiat took effective control of the Chrysler Group in 2009 and brought it out of bankruptcy.
In the first shareholders gathering since the death of Sergio Marchionne, FCA’s longtime chief executive, it fell to John Elkann, Fiat’s chairman, to deliver an optimistic forecast for 2019 despite the drop in the company’s business in North America and the slowdown in the sales of Jeep, which has emerged as the company’s principal brand.
Elkann, the representative of the founding Agnelli family, which has run Fiat for more than 100 years, told investors the Italo-American group was ready to play a part in the “new and exciting” era for the auto industry.
“Despite the (fact that the) second part of 2018 included trade difficulties in some areas that persisted in the first part of this year, we forecast a significative improvement in the second half of 2019,” Elkann said.
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Elkann, who is gradually taking larger role in the company, also said the Agnelli family was prepared to take “bold and creative decisions” to help build a solid and attractive future.
FCA CEO Michael Manley, who took up his post last July just prior to Marchionne’s death, said the group’s operating performance this year would exceed the record results posted in 2018. “I am confident that we will successfully deliver on our guidance for this year,” he said.
He added that he expected continued strong performance in North America, which accounts for almost 80% of core earnings, with higher margins compared with last year.
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Weaker margins in North America in the last quarter of 2018 raised concerns about a potential slowing demand in the United States, where FCA also faces stiff competition in the vital SUV and truck segments.
Underscoring the company’s optimism, the directors approved a cash dividend of 0.65 euros per outstanding common share, equivalent to an aggregate distribution of approximately 1 billion euros or $1.16 billion.
It was the first time Fiat has paid a dividend in more than a decade and the first dividend ever paid by the combination of Fiat and Chrysler.
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Manley also said he aimed to make dividends at FCA a regular feature after the group.