Although the war in Ukraine and the new lockdowns in China have caused gloomy clouds to pile up for the economy in recent months, large German companies have presented extremely solid balance sheets for the first three months of the year.

Compared to the same quarter of the previous year, the total sales of the Dax companies have increased by around 14 percent, and profits by as much as 21 percent.

Tillman Neuscheler

Editor in Business.

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Taken together, the companies from the top German stock exchange league generated an operating profit (EBIT) of around 52.4 billion euros. Of the 40 companies, 24 were able to increase their operating profit, only 16 saw their profit decline.

This is the result of an evaluation of the Dax 40 quarterly reports by the auditing company EY.

Although many large German companies had to cope with the withdrawal from Russia and also write off assets there, this is not of great economic importance overall.

The German car companies in particular made high profits in the first three months of the year.

Although many automakers are suffering from a lack of chips, many are concentrating on the lucrative luxury segment in view of the lack of parts.

The shareholders of Volkswagen can look forward to the highest profits, the largest German car manufacturer generated around 8.3 billion euros in operating profit before interest and taxes (EBIT) in the months of January to March, which is 73 percent more than in the same period of the year previous year.

However, as reported (FAZ of May 5), VW also benefited from a revaluation of financial instruments to hedge against fluctuating commodity prices.

Mercedes-Benz brought it to 5.2 billion euros in profit before deduction of taxes and interest (EBIT) in the three months, BMW still around 3.4 billion.

Many car manufacturers apparently managed to charge significantly higher prices for their cars.

Deutsche Telekom's profits have also developed well, with more than EUR 6.3 billion in profits remaining from sales after deducting costs.

This puts Telekom in second place behind Volkswagen in the Dax 40 ranking of the highest quarterly profits.

In percentage terms, however, Airbus was able to increase its profits the most: The aerospace company tripled its operating profit compared to the same period last year to 1.4 billion euros.

Only two of the 40 Dax companies made losses in the past quarter: Vonovia and Zalando.

Despite the extremely solid balance sheets of large German companies in the first quarter, many observers are concerned that German companies will continue to get away with it unscathed.

While the majority of companies have so far “managed well to navigate through these difficult times” by transforming supply chains and passing increasing costs on to their customers, says EY partner Mathieu Meyer, a chartered accountant, he fears that the The new geopolitical situation will also have significant long-term effects on the German economy: "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," says Meyer, adding: "It is quite possible

In the past three months, German companies have benefited from the strong economic recovery in America.

North America has thus developed into the sales engine for large German companies.

The sales of the Dax companies in North America increased by almost 19 percent and thus significantly more than Asia (plus 7.7 percent) and Europe (plus 6.4 percent).