Fiat Chrysler reported a fall in second-quarter operating profit as a better performance from its luxury brands and its Asia and European operations failed to offset weak Latin American and disappointing North American results.

The Italian carmaker, which is completing a merger with Chrysler to create the world’s seventh largest auto group, said earnings before interest and taxes (EBIT), including special items, stood at 961 million euros ($1.29 billion) in the April-June period, down from 1.07 billion euros the previous year.

Its net profit more than halved to 197 million euros from 435 million euros, hit by an increase in tax charges with U.S. earnings now subject to deferred taxation.

The company confirmed its full-year targets.

Latin America used to account for about a quarter of Fiat’s profits. Analysts were expecting a poor performance in the region, because of the impact of the strong euro against its currencies and the end of car sales incentives in Brazil, but the 23 percent drop in sales was bigger than some had expected.

Still, global sales rose to 23.3 billion euros from 22.3 billion the previous year, boosted by double-digit increases in Asia and the company’s luxury brands, which includes Ferrari and Maserati.

Results from its North American operations, which became increasingly important to Fiat after its business in Europe was hit by a six-year slump, disappointed, with operating profit down 18 percent despite a 7 percent rise in revenues.

However, the group almost broke even in Europe, helped by sales of the Fiat 500 family, the new Fiat Ducato and Jeeps.

Net debt stood at 9.7 billion euros at the end of June, down from 9.996 billion at the end of March. (Reuters)