German carmaker Daimler warns on profit

Source: Xinhua| 2019-07-12 21:59:45|Editor: xuxin
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BERLIN, July 12 (Xinhua) -- German carmaker Daimler foresees a major slump in profits this year, the company said on Friday.

The Daimler Group's earnings before interest and taxes (EBIT) for the second quarter (Q2) of 2019 were "significantly below market expectations." The company announced a preliminary loss of 1.6 billion euros (1.8 billion U.S. dollars) for Q2. Last year, the company's Q2 EBIT was 2.6 billion euros.

EBIT was impacted by a reassessment made in connection with "ongoing governmental and court proceedings and measures relating to Mercedes Benz diesel vehicles," which increased Daimler's expenses by around 1.6 billion euros.

Additionally, a "revised risk assessment" for an extended recall of Takata airbags has led Daimler to increase its provisions by around one billion euros.

Following a review of the product portfolio, Daimler now expects earnings of its Mercedes-Benz vans division to be around half a billion euros below previous estimates.

The lion's share of losses in Q2 are to come from the Mercedes-Benz vans division. According to preliminary results, losses in this division would amount to 2 billion euros.

While Daimler expects losses to total 0.7 billion euros in its important cars division, its trucks and buses businesses are set to generate 0.8 billion euros in profits in Q2.

Following the profit warning, Daimler shares fell by more than 4 percent prior to trading on Germany's DAX index on Friday but regained most of the losses throughout the day.