Continental Posts Loss In Q2, Says Outperformed Markets; Sees Significantly Lower FY20 Results
(RTTNews) - German automotive supplier and tire manufacturer Continental AG (CTTAY.PK) reported Wednesday that its second-quarter net loss was 741 million euros, compared to profit of 485 million euros a year ago.
The adjusted operating result or EBIT In the second quarter was negative 634 million euros, compared to prior year's positive 865 million euros. Adjusted EBIT margin was negative 9.6 percent, compared to positive 7.7 percent last year.
Consolidated sales in the second quarter amounted to 6.6 billion euros, down from 11.3 billion euros a year ago. Organic sales declined 40 percent.
Continental's business with industrial and end customers was down 23 percent in the second quarter, demonstrating that it is substantially more robust than global vehicle production, which fell 45 percent in the same period at 12.3 million units.
Second-quarter production figures in Europe and North America were very weak, at 2.0 million units, down 63 percent, and 1.3 million units, down 69 percent, respectively.
In contrast, production in China increased to 9 percent year-on-year thanks to government subsidy programs, with 5.9 million passenger cars and light commercial vehicles rolling off the lines.
CEO Elmar Degenhart, said, "At the low point of the worst economic crisis experienced by the automotive industry since the end of the Second World War, we outperformed our markets in China, the USA and Europe. We are keeping our targets firmly in sight. Our tough cost-cutting measures are having a quick and noticeable effect."
For the third quarter of 2020, Continental expects global vehicle production to fall substantially by 10 to 20 percent year-on-year.
Further, Continental said it is currently still refraining from providing a detailed outlook for the 2020 fiscal year.
However, the company is expecting sales volumes, sales and adjusted EBIT to fall significantly short of the previous year's figures.
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