Daimler Q2 Loss Widens On Weak Demand; Sees Operating Profit In FY20; Stock Up
Shares of Daimler AG (DDAIF.PK) were gaining around 6 percent in the morning trading in Germany after the auto giant reported Thursday that it started seeing first signs of sales recovery amid Covid-19 pandemic, and projects to record an operating profit in fiscal 2020. This was despite reporting wider loss and weak sales volume in its second quarter hurt by the virus-related lockdowns.
Group EBIT for full year 2020, however, will be lower than in the previous year, the company noted. At Mercedes-Benz Cars & Vans division, EBIT is expected to be above the prior year, which was burdened by substantial special effects.
The company projects that the COVID-19 pandemic will continue to have a strong impact on developments during the rest of the year.
Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG, said, “We are now seeing the first signs of a sales recovery – especially at Mercedes-Benz passenger cars, where we are experiencing strong demand for our top end models and our electrified vehicles. Going forward, we are firmly determined to continue to improve the cost base of our company.”
For the second quarter, second-quarter net loss attributable to shareholders was 2 billion euros, wider than last year’s loss of 1.33 billion euros. Loss per share was 1.87 euros, compared to loss of 1.24 euros a year ago.
Group EBIT was a loss of 1.68 billion euros, compared to loss of 1.56 billion euros in the prior year. Adjusted EBIT was loss of 708 million euros, compared to profit of 2.45 billion euros.
Revenue for the quarter declined 29 percent to 30.18 billion euros from prior year’s 42.65 billion euros.
The company sold 541,800 passenger cars and commercial vehicles in the quarter, 34 percent lower than prior year’s 821,700 units.
According to the company, the key results were strongly influenced by the corona pandemic and the resulting decline in demand for cars, vans, trucks and buses. Meanwhile, Daimler said it countered the drop in demand by quickly suspending production in March, April and May, and by introducing short-time work.
Sales of the Mercedes-Benz Cars & Vans division decreased 30 percent to 480,800 vehicles. The Daimler Trucks & Buses division showed a decrease in unit sales of 55 percent. At Daimler Mobility, new business decreased by 24 percent.
In Germany, Daimler shares were trading at 41.46 euros, up 5.86 percent.
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