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Conti Plans Further Cost Cuts as Profits Plunge
Continental AG vows “rigorous cost discipline” after a sharp drop in second-quarter profits.
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Continental AG vows “rigorous cost discipline” after a sharp drop in second-quarter profits.
Conti’s group sales for the period were flat at €22.3 billion ($25.3 billion). But pretax earnings fell 33% to €743 million ($833 million), and net income plummeted 41% to €485 million ($544 million).
Revenue from automotive operations dropped in April-June by 3% to €6.8 billion ($7.6 billion).
Chief Financial Officer Wolfgang Schaefer blames the downturn on slumping global vehicle production. He does not expect conditions to improve in the second half of 2019. The company anticipates a 5% decline in full-year vehicle output.
Conti says it has dropped plans to produce solid-state battery cells. The company also will halt expansion of its hydraulic components business, which includes fuel injectors and pumps, because of falling demand for internal combustion engines. New orders in the sector “will play an increasingly marginal role,” the company adds.
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