Continental reported a second-quarter operating loss of 829 million euros ($980 million) as global vehicle production fell by 45 percent. The supplier said it could not give a detailed 2020 guidance because of the ongoing impact of the coronavirus pandemic.
Continental said Wednesday that revenue, adjusted operating profit and free cash flow are expected to significantly decline this year. The loss annouced today was previewed last month when Continental released partial figures.
"There are still big economic uncertainties," the company said in a statement. Global vehicle production is likely to fall by 10 percent to 20 percent in the third quarter compared with 2019, it said.
Continental reported earnings before interest and taxes (EBIT) of minus 829 million euros, compared with a gain of 753 million euros during the same period in 2019. Its adjusted EBIT margin was minus 9.6 percent in the quarter versus a 7.7 percent margin in 2019.
Revenue in the quarter was 6.6 billion euros, down from 11.3 billion euros in 2019.
CEO Elmar Degenhart said in a statement that cost-cutting measures to offset the crisis were having a “quick and noticeable effect.” Continental has set a target of cutting fixed cash costs by more than 5 percent and reducing capital expenditure by more than 25 percent this year.
Continental said it had reduced its capital expenditure on property, plant and equipment, and software to 448 million euros in the quarter, compared with 785 million euros in 2019.
In June, a report in German news media said Continental was weighing job cuts.
The supplier said all plants worldwide resumed production by early June but some are running at "greatly reduced levels in line with substantially lower global demand." About a quarter of employees are working reduced hours, Continental said.
Sales in the Automotive Technologies division fell by 47 percent in the second quarter to 2.56 billion euros, compared with 4.84 billion euros in 2019. The division had an operating loss of 552 million euros, compared with a gain of 276 million euros last year.
Revenue at the Powertrain Technologies unit fell by 43 percent to 1.13 billion euros versus 1.96 billion euros in 2019. The division recorded an operating loss of 244 million euros, compared with a profit of 56 million euros last year.
Continental ranks No. 4 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of $35.3 billion in 2019.
Reuters contributed to this report