Berkshire, profits plummet: Kraft and the dollar weigh heavily
Second quarter profits more than halved due to a $3.8 billion write-down of its investee and currency depreciation
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Key points
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Berkshire Hathaway, the investment giant of financial guru Warren Buffett, saw second-quarter profits more than halve in the face of a $3.8 billion writedown of its stake in Kraft Heinz, difficulties in its insurance business, and the depreciation of the dollar.
The numbers
.The group posted a net profit of USD 12.4 billion, compared to USD 30.3 billion for the same period in 2024. Operating profit was down 4% to $11.16 billion from $11.6 billion a year earlier. Berkshire wrote down the value of its stake in Kraft Heinz to $8.4 billion.
Earnings from the insurance sector declined - after a particularly strong 2024 - overshadowing the results of holdings in railways, energy, manufacturing, services and retail. Excluding the dollar exchange rate, however, operating profit would be improving. Berkshire has debt denominated in sterling, euro and yen, which is revalued in dollars at the current exchange rate in its quarterly reports. Buffett's group reported an increase in cash holdings to $344 billion, a record, from $333 billion at the end of March.
The succession
.On 3 May, Warren Buffett, 94, decided to step down from the helm of Berkshire Hathaway, announcing this at the holding company's annual shareholders' meeting. Buffett stated that 'the time has come'. The time is right for Greg Abel - Berkshire Hathaway's vice chairman - to succeed him. The formal handover should take place by the end of the year.
