The third largest German automotive supplier Continental performed better operationally in the second quarter than the market had expected. However, impairments on the Russian business and restructuring costs for the subsidiary Mobile Fluid Systems totaled almost half a billion euros, the group announced on Wednesday. Nevertheless, Conti was able to score points on the stock exchange. In the Dax, the papers increased by 2.3 percent to 72.56 euros.
According to initial calculations, Conti posted sales of 9.4 billion euros and an operating return on sales of 4.4 percent in the period from April to June, which corresponds to an EBIT of a good 410 million euros. Experts had expected revenues of 9.2 billion euros and an EBIT margin of 4.2 percent. For the second quarter of 2021, Conti reported adjusted EBIT of 711 million euros and sales of 9.9 billion.
The board of directors stuck to the forecast for 2022, which was lowered in April. Sales should be between 38.3 and 40.1 (previous year 33.8) billion euros and the operating return between 4.7 and 5.7 percent. According to previous information, the group expects in view of the pandemic and that Ukraine-War this year with additional costs for energy, logistics and material of 3.5 billion euros.
Automotive division performs better
In the quarter, sales, especially in the automotive division, were better than the experts Conti had expected, at 4.3 billion euros. The operating result in the tire business was above expectations, at Contitech significantly below.
However, Continental has to write down almost half a billion euros. Goodwill and property, plant and equipment account for 370 million euros because interest rates have risen and the discount factor has increased as a result. The additional sanctions against Russia are reflected in the tire division’s business there with write-downs of 75 million euros. Continental had recently considered a complete withdrawal from Russia.