FRANKFURT AM MAIN: Mercedes-Benz maker Daimler on Wednesday reported its first quarterly loss in almost 10 years, saying cash it had to set aside over emissions cheating and vehicle recalls drove it into the red.
The Stuttgart-based car maker said in a statement it lost 1.2 billion euros ($1.3 billion) in April-June due to one-off effects totalling 4.2 billion euros.
The last time Daimler reported a quarterly loss was in the fourth quarter of 2009.
“Our second-quarter results were mainly impacted by exceptional items,” newly-installed chief executive Olla Kallenius told reporters.
By contrast, revenues rose by five percent to a higher-than-expected 42.7 billion euros, despite a one percent fall in unit sales.
Daimler also tumbled into the red on the operating level, losing 1.5 billion euros — compared with underlying profit of 2.6 billion euros a year ago.
– ‘Anything but satisfactory’ –
The figures are “anything but satisfactory”, admitted Kallenius, a Swede who has been at the helm since May when predecessor Dieter Zetsche stepped down.
“Expect a noticeable improvement in the second half of the year based on our strong product portfolio.”
In response to the poor figures, Kallenius promised to “intensify” savings measures launched by Zetsche and “focus in the second half of the year on improving our operating performance and cash-flow generation.”
The operational loss is a “remarkably bad” result and shows there is a “lot of work for Mr. Kallenius” to do, said analyst Jurgen Pieper at Metzler Bank.
“I think Daimler hasn’t been managed so well in the last two years,” added Pieper in a dig at Zetsche.
After cutting its annual outlook twice in recent months, Daimler left the forecast unchanged this time around, predicting operating profit “significantly below” the 11.1 billion euros booked in 2018.
The auto giant pointed to weaker-than-expected growth on global car markets, fallout from the diesel emissions cheating scandal and a mass recall over faulty Takata airbags.
The defect, discovered in 2014 by the authorities in America and affecting around 100 million vehicles worldwide across a variety of manufacturers, has resulted in around 20 deaths.
German transport authority KBA also ordered the recall of 60,000 Mercedes-Benz vehicles in June on suspicion they were fitted with software to cheat emissions tests — allegations Daimler contests.
– Heavy costs –
Diesel-related provisions alone are expected to reach around 1.6 billion euros, and the airbag recall should cost around one billion euros.
The group is also looking to make massive investments in electric vehicles and autonomous driving.
Nevertheless, both unit sales and revenue should climb “slightly above” last year’s levels.
Kallenius has said the group will now cherry-pick in a bid to be more efficient.
“We have launched efficiency programmes for all divisions,” including a review of product and technology portfolios “to see where we expect the best returns” and “where we want to allocate our capital,” he said.
However, he declined to give details, promising a “more complete” presentation of these savings programmes as part of the investors’ day in November.
Earlier this week, Daimler announced that its Chinese partner BAIC would become a shareholder with a five-percent stake.