Italian car maker Fiat on Wednesday reported second quarter results showing improved sales of agricultural equipment and trucks helped generate a net profit of 90 million euros ($116 million) compared with a loss of 168 million over the same period last year.
Fiat, which manufactures cars under the Fiat, Alfa Romeo and Lancia brands, as well as trucks (Iveco) and farm equipment (Case and New Holland) reported net revenues were up 12.5% to 14.8 billion euros.
The Turin-based company which controls U.S. carmaker Chrysler, also said its board approved a "demerger" plan to spin off its industrial vehicle and auto businesses into two distinct companies giving birth to a global automotive company that will incorporate Chrysler.
The plan that was first announced in April is expected to be implemented in January 2011, Fiat said.
After the demerger, the two companies will be separately listed on the Milan stock exchange and will operate as independent companies with their own management teams and boards of directors.
In the second quarter, revenues at Case New Holland (CNH) rose 16% to 3.3 billion euros as higher sales in North and South America helped offset weak markets in Europe, Australia and the former Soviet Union.
Fiat Group Autos reported revenues of 7.4 billion euros , up 6.4%.
In terms of the planned demerger, Fiat will create Fiat Industries SpA, comprising CNH agriculture and construction equipment, Iveco and FPT Industries and Marine activities, while Fiat SpA will include Fiat Group Autos, which includes the Fiat, Alfa and Lancia brands, Maserati and 85% of Ferrari, as well as components businesses and other related assets.