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Continental AG Q1 Net Income Declines; Organic Sales Down 10.9%

Continental AG (CTTAY.PK) reported that its first quarter net income to shareholders declined to 292.3 million euros from 575.2 million euros, previous year. Earnings per share was 1.46 euros compared to 2.88 euros. Adjusted EBIT declined to 432 million euros from 884 million euros. Adjusted EBIT margin was 4.4 percent compared to 8.1 percent.

First quarter sales were 9.84 billion euros, 10.9 percent lower than in the previous year. In organic terms, sales also decreased by 10.9 percent, for the quarter. Adjusted sales were 9.74 billion euros compared to 10.92 billion euros, prior year.

Continental said the company's sales and profits declined significantly in the first quarter primarily due to the production stop in China. Continental expects sales and earnings in 2020 to be significantly below previous year's figures. The company said its second quarter will be the weakest quarter of the current fiscal year with regards to sales and earnings.

Continental said it is continuing to consistently pursue and implement its Transformation 2019-2029 structural program. The Executive Board has decided to extend its original one-month waiver of 10 percent of fixed salary by a further three months until the end of July.

As of the beginning of May, production still remains temporarily halted at one-fifth of Continental's 249 production locations worldwide.

As at March 31, 2020, Continental had cash and cash equivalents of 2.5 billion euros and committed unused credit lines of 4.3 billion euros.

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