Luxury car maker Daimler has issued its third warning for 2019 as earnings almost halved last year.
The German company blamed costs linked to the diesel emissions scandal and the switch to electric cars, as well as production issues.
It said it would book additional expenses of up to €1.5bn (£1.28bn, $1.66bn) related to Mercedes-Benz’s diesel issue, when the company had to recall thousands of diesel cars in Germany, after insisting for years its engines complied with emission rules.
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Earnings before interest and tax, excluding litigation costs, are expected to shrink to €5.6bn in 2019 from €11.1bn a year earlier.Full-year earnings will be released on February 11.
Profit at the core Mercedes-Benz unit roughly halved to €3.7bn as the operating return on sales slumped by almost half to 4 per cent.
At the van unit, operating return swung to a €2.4bn loss from a profit of €300m a year earlier, Daimler said.
Tom Narayan, an analyst at RBC Europe, wrote in a research note that the car maker may reduce its dividend by more than half to €1.60 this year. “We do not believe Daimler faces a liquidity risk even with increased one-time provisions,” he said.
Daimler shares were down 1.3 per cent in mid-day trading in Frankfurt.
CEO Ola Kallenius has launched a major overhaul of Daimler’s operations since taking over in May 2019. The company plans to cut more than 10,000 jobs worldwide to save about €1.4bn in personnel costs.