BERLIN, Aug. 7 (Xinhua) -- Net profits of Continental amounted to 484.8 million euros (543.5 million U.S. dollars) in the second quarter of 2019 (Q2), marking a year-on-year decline of 41 percent, Germany's second largest automotive supplier announced on Wednesday.
"At present, our business is being influenced by the slowdown in global automotive production," said Wolfgang Schaefer, chief financial officer (CFO) of Continental.
Continental announced that operational profits (adjusted EBIT) declined 24.8 percent year-on-year to 868.1 million euros in Q2, equating to an EBIT margin of 7.8 percent and a decline by 2.4 percentage points from the prior-year figure.
Despite a "sharply declining market," the German automotive supplier had achieved an "overall solid result" in Q2, Continental stated.
In the context of a 7 percent decline in the "global production of passenger cars and light commercial vehicles," the German automotive supplier announced that turnover had declined by 1 percent to 11.3 billion euros in Q2.
"With a slight drop in our sales in the second quarter, we were to some extent able to avoid the effects of the negative developments in our markets," noted Continental CFO Schaefer.
The German automotive supplier announced in its half year report that Vitesco Technologies, Continental's drivetrain business, would "concentrate more closely" on electric mobility.
"We are aligning our powertrain operations consistently toward this since the market is clearly moving in this direction," emphasized Elmar Degenhart, chief executive officer (CEO) of Continental.
The German automotive supplier announced that it had "ended considerations" to enter the production of solid-state battery cells, adding that Continental "had always ruled out taking up the production of modern-day lithium-ion cells".
"Continental can no longer set up an attractive business model with the solid-state technology which will probably not be available until after 2030," said Continental CEO Degenhart.
In addition, Continental said that it was planning to "cease further expansion" of its hydraulic components business, which included injectors and pumps for gasoline as well as diesel engines due to "falling demand for combustion engines".
Continental was not expecting its business to improve in the second half of 2019 as the company announced it was anticipating global vehicle production to fall by around 5 percent this year.
Back in July, the German automotive supplier had already lowered its business guidance and was currently expecting its annual turnover to amount to between 44 and 45 billion euros.
"For the second half of the year, we do not expect the headwind to ease," said CFO Schaefer on Wednesday, adding that Continental was not currently expecting a market upturn "in the short to medium term".
