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AFP
Frankfurt
German auto giant Daimler warned Wednesday that its 2019 earnings could fall short of expectations due to massive new charges over diesel emissions cheating, further clouding the outlook for the vital car sector as a whole.
The group, which owns Mercedes-Benz, said its full-year earnings will be hit by between 1.1 and 1.5 billion euros ($1.2-1.7 billion) in provisions.
According to its preliminary financial results for last year, operating profit not including the “anticipated additional expenses for ongoing governmental and court proceedings and measures relating to Mercedes-Benz diesel vehicles” amounted to 5.6 billion euros.
That was “significantly below” the year-earlier level of 11.1 billion euros and “below earnings expectations,” Daimler said.
“After two profit warnings, new Daimler boss Ola Kallenius is horrifying investors with catastrophic preliminary figures for 2019,” judged industry analyst Frank Schwope of Nord/LB bank.
On top of recalls prompted by the diesel scandal and other technical defects, a slowdown in the global car market has also dragged on Daimler.
Nevertheless, the company has stuck to its guidance that 2019 revenues should come in “slightly above” the previous year’s total of 167.4 billion euros.
Further details of the group’s 2019 performance will be published on February 11, Daimler said.
The news pushed Daimler’s stock to the bottom of the blue-chip DAX index in Frankfurt, where it showed a loss of 1.5 percent to 45.72 euros at around 1:10 pm (1210 GMT).
Since taking over in May, CEO Kallenius’ first year in the top job has been plagued by bad news.
Daimler reported its first quarterly net loss in a decade in the period from April to June last year, when it was forced to set aside 4.2 billion euros in provisions to cover a massive recall of cars allegedly fitted with software to cheat emissions tests.
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23/01/2020
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