Thursday April 23, 2020
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They are only preliminary figures, but they speak a clear language: Germany’s leading premium car maker Daimler sags the result at the start of the year. A reason is quickly found.
Daimler suffered a significant drop in profits due to the corona virus pandemic. In the first three months, the Group’s adjusted operating profit (EBIT) dropped to EUR 719 million after EUR 2.31 billion in the first quarter of 2019, as the Dax company announced on the basis of preliminary figures. Daimler expects losses throughout 2020 as well.
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The effects of the corona pandemic on customer demand, supply chains and vehicle production could not be estimated in detail and on a safe basis, making it difficult to make a forecast for the current 2020 financial year. Regardless of this, it is assumed that the sales and turnover of the group in 2020 will be below the level of the previous year. In view of the expected market development and assessment of the business areas, the Group EBIT will also be lower.
Production is currently ramping up
Daimler is financially well positioned to start again after the Corona crisis: “Given the fact that we have taken comprehensive measures to protect our cash reserves and increased our financial flexibility, we are confident that we will be good for the period during and after the crisis to be positioned. “
The group has been restarting its plants in large parts of its production since Monday after four weeks of standstill. Short-time work has also been in effect since April 6, which, according to the current status, should only expire at the end of April. Around 80 percent of the approximately 170,000 employees in Germany are affected to varying degrees.
Daimler also justified the production stop with the worldwide decline in demand due to the corona virus crisis. According to information from the beginning of April, the group sold around 477,400 cars worldwide from its core brand Mercedes-Benz, almost 15 percent less than in the same period last year. Vans sales declined to the same extent. At Daimler, the savings program of CEO Ola Källenius should actually pick up speed.
Daimler plans to publish the full quarterly figures on April 29.
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