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Ferrari has a one-off tax break to thank for its doubled net earnings in the third quarter of 2018. Without taking advantage of the benefit, growth for the exotic automaker would have shown much less in the quarterly report.
The Maranello manufacturer revealed its earnings in a release on Monday, highlighting an odd-sounding program that can only be described as a tax incentive not offered to companies inside the United States. It essentially provides Italian companies a reduced tax rate of corporate income based on certain assets like copyrights, patents, trademarks, design, and even just know-how. The patent box tax break is then negotiated upon with the Italian authorities, in this case.
With this break, Ferrari reported net earnings of $327 million in this latest quarter of 2018, compared to a net profit of $161 million in Q3 2017. One could argue that the brand simply had a period of sales expansion, but they wouldn’t be wholly correct. While any quarter that heads toward profit is a plus, Ferrari’s sales from July to September weren’t strong enough on their own to double the company’s overall figures.
Without taking advantage of the tax incentive, the company’s earnings grew by just five percent. Ferrari can boast that deliveries are up by 11 percent, largely thanks to the sales of the 812 Superfast and the Ferrari Portofino. Sales in Europe and the Middle East doubled to a 1,005 total, with sales in America growing by five percent and seven percent in China.
Once the 2018 year closes, the projection is a total of 9,000 models sold and profits of $1.25 billion.
