Carmaker Daimler records net loss of $1.34bn in Q2
INTERNATIONAL - After two recent profit warnings, Daimler recorded a net loss of 1.2 billion euros (1.34 billion US dollars) in the second quarter of 2019, the German carmaker announced on Wednesday.
Although revenues increased by 5 percent to 42.7 billion euros, Daimler's Group earnings before interest and taxes (EBIT) fell to minus 1.6 billion euros.
Daimler also announced that Group EBIT for the entire year would be "significantly below" the prior-year level.
"Our second quarter results were mainly impacted by exceptional items of 4.2 billion euros. Therefore, our focus for the second half of this year is on improving our operating performance and cash-flow generation," said CEO Ola Kaellenius, Chairman of the Board of Management of Daimler.
In the first six months of 2019, the free cash flow of Daimler's industrial business went from a plus of 1.8 billion euros in 2018 to minus 3.3 billion euros.
According to Daimler, "the sharp decrease resulted in particular from higher working capital, as well as a continued high level of investment in future products."
Daimler's core business, Mercedes-Benz Cars, showed signs of weakening as total sales in the second quarter decreased by 3 percent compared to last year and revenues went down by 1 percent to 22.3 billion euros.
The German carmakers truck division developed better. Daimler Trucks recorded an increase in unit sales of 2 percent and grew revenue by 14 percent to 10.5 billion euros in Q2. EBIT increased by 33 percent to 725 million euros.
"In general, we are intensifying the Group-wide performance programs and reviewing our product portfolio in order to safeguard future success. At the same time, we are continuing consistently our company transformation," added Daimler chief Kaellenius.
Despite the weak financial figures, Daimler is expecting group sales in 2019 at the previous year's level and revenue "slightly above" the prior year. Worldwide, the German carmaker is employing around 300,000 people.
According to Daimler, 177,480 people worked in Germany, 27,220 in the United States while Daimler's consolidated subsidiaries in China employed 4,503 people at the end of June.