Increased costs and numerous special effects have the automotive supplier Continental pushed surprisingly deep into the red. The bottom line is that the Dax group reported a loss of 251 million euros for the second quarter on Tuesday, after a profit of 545 million a year ago. Analysts had expected a profit for the quarter. the Continental shares
loses about 1.3 percent around noon.
“The current headwind is hurricane-like and will not subside in the short term,” said CFO Katja Dürrfeld. For the second half of the year, Continental expects supply chains to stabilize and semiconductors to be more readily available. Auto production will increase. Group CEO Nikolai Setzer (51) referred to a high order intake in the automotive supplier division of over six billion euros. Despite the impending gas shortage, management assumes that the energy supply in Europe and Germany will remain stable.
“We are not satisfied with the current result – even if we expected it to be so,” said Dürrfeld, looking at the loss. The group has taken numerous measures to reduce costs and stabilize the supply chains. This includes the distribution of purchasing across several sources, the creation and maintenance of safety stocks and holistic control of the procurement and logistics chain in the electronics sector.
Conti wants to reduce costs and negotiate prices with customers
Price negotiations with customers are conducted with the aim of jointly bearing the costs. Furthermore, Conti is concentrating on the business with technologically sophisticated products, from which the group earns more. For example, the share of premium tires in sales is increasing.
Natural gas is an important part of Continental’s energy mix, the company said on request. A reliable energy supply is an indispensable basis for stable economic conditions. We are therefore closely monitoring the current situation. The indirect effects of a massive gas shortage would be significantly higher than the direct effects at Continental production sites. Conti pointed out that supplier industries such as the chemical industry would be more affected. Loss of production there could also lead to delivery bottlenecks in the automotive industry.
Continental cited the price increases for raw materials, energy and logistics triggered by the Ukraine war as well as the shortage of electronic components and the corona lockdowns in China as the reason for the net loss. In addition, the automotive supplier was burdened by numerous special effects that add up to more than half a billion euros.
The Lower Saxony had already published preliminary operating figures for the second quarter on July 20th and also confirmed their forecast for the year as a whole. According to this, group sales should increase to between 38.3 and 40.1 (previous year 33.8) billion euros, with an operating return of between 4.7 and 5.7 percent. At 4.4 percent, it was below this target corridor in the second quarter.
As already known, the group’s sales from continuing operations in the months of April to June increased by 13 percent to 9.4 billion euros. Increased costs for energy, procurement and logistics weighed on day-to-day business: Adjusted for special effects, earnings before interest and taxes fell by around a fifth to EUR 410.5 million. The automotive supplier was operationally in the red.