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, WDH / ROUNDUP: Continental catches up with something – burden new special costs | message, Forex-News, Forex-News
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WDH / ROUNDUP: Continental catches up with something – burden new special costs | message

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, WDH / ROUNDUP: Continental catches up with something – burden new special costs | message, Forex-News, Forex-News


, WDH / ROUNDUP: Continental catches up with something – burden new special costs | message, Forex-News, Forex-News

(Repeat: The heading has been rephrased.)

HANNOVER (dpa-AFX) – After the Corona slump in the spring, business at Continental is better again. But the expensive restructuring of the company and the gloomy prospects for global car production keep the supplier under pressure. The group now gave itself a new outlook after the third quarter. The share lost on Wednesday after the strong previous days.

For 2020, Conti is anticipating a global production decrease of up to 19 percent for cars and light commercial vehicles. According to the new forecast, sales of the group could land at 37.5 billion euros (2019: 44.5 billion euros) – provided that there are “no new, unexpected effects of the ongoing coronavirus pandemic” among other things.

Adjusted for special effects, the operating profit margin before interest and taxes should reach 3.0 percent, after 7.4 percent in the previous year. The auto supplier division, which is particularly affected by the Covid 19 pandemic, should make an operating loss in the year, as the Hanoverians said on Wednesday. In the fourth quarter, expected provisions for warranties and higher research and development costs in the division would have a greater impact than previously assumed, the company warned.

The share lost around 2.3 percent in the morning to 104.60 euros and fluctuated noticeably. Goldman Sachs analyst Gungun Verma described the outlook as largely as expected. The operating result in the fourth quarter should, however, take a significant step back with the announced special factors. The forecast for the business with tires and plastics technology is better than the market estimates. Investors could, however, have been more positive overall beforehand – the special charges could therefore be taken up negatively on the market.

The net loss in the third quarter was just under 720 million euros. This is only a slight improvement over the previous quarter, when the bottom line was a minus of 741 million euros on the balance sheet. On the other hand, Conti reported a clear improvement in ongoing operations: The deficit before interest, taxes and special items of 634 million euros was most recently turned into an adjusted profit of 832 million euros.

“We did remarkably well operationally in the third quarter,” said CEO Elmar Degenhart. “In a market environment that remains difficult, we are showing a more than satisfactory performance on which we can build.” The auto market stabilized in China and North America. The Hanoverians’ turnover is well below the previous year’s level: it fell by more than 7 percent to 10.3 billion euros. Since the beginning of the year, revenues have even slumped by almost a fifth, and on this basis the net loss was more than a quarter greater than in 2019.

Degenhart, who is to be replaced at the top of the board at the end of November, spoke of “a certain degree of caution” that should be maintained in view of the consequences of the virus crisis. However, there is reason to be more optimistic after the unprecedented weak second quarter. Much will depend on how well the pandemic is contained. During the first Corona wave, the automotive and mechanical engineering industries had to struggle with drastic falls in orders and interrupted supply chains.

Another important reason for the ongoing burdens are high depreciation and renovation costs. Continental has to adjust the value of parts of the company that were once taken over, as well as that of certain production facilities. Added to this are the costs of the controversial “Transformation 2019-2029” strategy, with which the Conti Group intends to develop further in the direction of software and electronics. Up to the end of the year “further expenses in an as yet not fixed amount” are expected. And provisions for warranties and higher research and development costs are likely to have a greater impact than previously assumed, the group warned.

Trade unionists and works councils recently ran a storm against the expanded job cuts, and in factories like Aachen and Karben, major parts of production are to be shut down. Conti strives to further qualify as many employees as possible within the framework of the structural change in the industry. However, many of the roughly 30,000 jobs affected worldwide are also being relocated or canceled. Degenhart explained: “With the most recent decisions in the Executive and Supervisory Boards, we have passed an important milestone and are now increasingly turning our gaze to the future.” / Jap / DP / men / jha /

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, WDH / ROUNDUP: Continental catches up with something – burden new special costs | message, Forex-News, Forex-News

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, WDH / ROUNDUP: Continental catches up with something – burden new special costs | message, Forex-News, Forex-News
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