Continental FY Profit Drops

Automotive supplier and tire manufacturer Continental (CTTAY.PK) reported that its net income for fiscal year 2022 dropped to 67 million euros from last year's 1.4 billion euros.

The company's performance was particularly impacted by the effects of the war in Ukraine, the restrictions due to the coronavirus pandemic in China, the ongoing semiconductor shortage and additional costs of around 3.3 billion euros resulting from price increases for raw materials, semi-finished products, energy and logistics.

Consolidated sales for the year were 39.4 billion euros, an increase of 16.7 percent from prior year. Before changes in the scope of consolidation and exchange-rate effects, sales rose by 12.3 percent.

The Executive Board will propose to the Annual Shareholders' Meeting a dividend of 1.50 euros per share.

For the current fiscal year, the technology company expects higher sales and earnings, due to rising production figures for passenger cars and light commercial vehicles and continued high cost discipline.

Continental expects global production of passenger cars and light commercial vehicles to increase by between 2 and 4 percent in 2023. In 2022, this increased by around 7 percent to about 82 million vehicles.

Significantly higher costs for materials, wages and salaries as well as energy and logistics - amounting to around 1.7 billion euros - are again expected to weigh heavily on the earnings position in fiscal 2023.

Continental anticipates consolidated sales to be in the range of around 42 billion euros to 45 billion euros and an adjusted EBIT margin of around 5.5 to 6.5 percent for 2023.

In the medium term, Continental aims to achieve a consolidated adjusted EBIT margin of around 8 to 11 percent.

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