Mercedes reports big financial loss for 2014

Mercedes' company accounts for the 2014 financial year have revealed just how costly winning the world championship can prove to be.

According to the car manufacturer's official company financial report for last year, Mercedes AMG Petronas F1 Team posted a loss of £76.9 million ($117m) while clinching its first driver and constructor world championships since the marque returned to Formula One as a works team.

A large portion of the costs were related to the development of the new hybrid V6 power unit which has proven the class of the field ever since it took to the track.

Increased staff numbers (up from 663 in 2013 to 765) and bonuses calculated according to the team's end-of-year success also made a big impact in the accounts. In total, operating costs were reported to have risen from £190.7m in 2013 to £240.2m in 2014.

However, the report added that the losses were "within the pre-defined parameters set by the shareholders."

On the brighter side for Mercedes, the accounts show a substantial increase in income thanks to their success in Formula One. Revenue from the sporting division - mainly from sponsorship and prize money - increased from £125.2m to £146.9m year-on-year.

And even better is the outlook for the team for its 2015 revenues as reigning world champions.

"The agreement with the Commercial Rights Holder has provisions for significantly increased revenue flows based on sporting performance, some of which will be triggered in 2015 as a result of the team's performance in 2014," the financial report pointed out.

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Andrew Lewin

Andrew first became a fan of Formula 1 during the time when Michael Schumacher and Damon Hill were stepping into the limelight after the era of Alain Prost, Nigel Mansell and Aryton Senna. He's been addicted ever since, and has been writing about the sport now for nearly a quarter of a century for a number of online news sites. He's also written professionally about GP2 (now Formula 2), GP3, IndyCar, World Rally Championship, MotoGP and NASCAR. In his other professional life, Andrew is a freelance writer, social media consultant, web developer/programmer, and digital specialist in the fields of accessibility, usability, IA, online communities and public sector procurement. He worked for many years in magazine production at Bauer Media, and for over a decade he was part of the digital media team at the UK government's communications department. Born and raised in Essex, Andrew currently lives and works in south-west London.

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