Continental AG declares €1.23 billion in net loss in fiscal 2019

In
its announcement on Thursday, Continental AG declared 2019 as a year of loss
for the German
automotive manufacturing company. Following the revelation of loss,
Continental also decided in favor of cutting its dividend on Thursday.

In
fiscal 2019, the car-parts manufacturer highlighted to have faced a massive €1.23
billion ($1.37 billion) in net loss. In 2018, Continental had recorded €2.90
billion in net profit instead. Figures for 2019 came out worse than what the
analysts had forecast. Their estimate was capped at a net loss of €623.10
million for Continental AG in 2019, according to FactSet.

Continental
AG Posts €6.13 Of Loss Per Share In 2019

Continental’s
loss translated to €6.13 per share in 2019 as compared to €14.49 per share in
profit that was recorded in 2018.

Before
interest/taxes, Continental’s loss was reported at €268.3 million last year
that marked a sharp decline as compared to 2018 when the company had recorded €4.03
billion in earnings (before interest/taxes).

As
of Thursday, the automotive company has reduced its dividend to €4 per share
versus a much higher €4.75 in 2018. On the sales front, however, the company
recorded a slight improvement of 0.2% as compared to 2018. Continental AG
announced its annual sales at €44.48 in 2019. In 2018, the sales figure was
registered slightly lower at $44.40 billion.

In
its guidance for fiscal 2020, the company remained dovish and forecast further pressure
on the market. Continental estimates its annual sales to lie within the range
of €42.50 billion and €44.50 billion this year. Forecast for earnings margin
before interests and taxes also known as EBIT (adjusted) was accentuated at
5.5% to 6.5% on Thursday.

Executive Board Chairman Elmar Degenhart’s Comments

Continental AG’s executive board chairman, Elmar Degenhart, commented on Thursday’s results and stated:

“We
are currently looking into how we can effectively respond to a weakening
overall situation and its impact in the medium term, with further measures that
go beyond our current structural program.”

At
the time of writing, Continental
AG is exchanging hands at $9.75 per share in the stock market that
translates to around 25% decline in 2020 so far. Its performance in 2019 wasn’t
optimistic either with the stock keeping almost flat on average for the year.
It opened at around $13.80 per share in January 2019 while closed the year only
slightly lower at $12.85 per share in December. Continental AG currently has a
market cap of $1.95 billion.