German automotive supplier Continental AG (CTTAY.PK) reported a surge in profit for fiscal 2012 from last year, thanks to higher sales and improved margin. The company also announced a dividend, and said it expects higher sales for fiscal 2013, despite muted market prospects.
Continental's CEO Elmar Degenhart said, "In 2012, Continental increased profits to just short of €1.9 billion, topping the previous year's level by more than 50 percent. At €9.42, we have very nearly double-digit earnings per share. What is more, we cut our net indebtedness by close to €1.5 billion, bringing it down to a reasonable level. At the same time, we have utilized our greater flexibility and given our future growth a good shot in the arm with higher spending on investments and R&D."
In its fiscal year 2012, net income attributable to shareholders grew 51.6 percent to 1.88 billion euros from 1.24 billion euros in the previous year. On a per share basis, earnings were 9.42 euros, higher than prior year's 6.21 euros.
Annual sales rose 7.3 percent to 32.74 billion euros from 30.50 billion euros last year. Adjusted sales, before changes in the scope of consolidation, grew 6.7 percent from last year to 32.55 billion euros.
In the year, earnings before interest, tax, depreciation and amortization or EBITDA, a key earnings metric, climbed 14.8 percent from last year to 4.85 billion euros, and EBITDA margin improved to 14.8 percent from last year's 13.9 percent.
Operating result improved 18.3 percent, and margin grew to 9.4 percent from 8.5 percent last year. Adjusted operating result, which excluded acquisition-related amortization and special effects, improved 15.8 percent, and adjusted margin grew to 10.8 percent from 10 percent a year ago.
Further, the company said that its Executive Board will propose payment of a dividend of 2.25 per share euros at the annual shareholders' meeting on May 15.
Looking ahead for fiscal 2013, Continental expects to boost sales 5 percent to more than 34 billion euros, despite muted market prospects. The adjusted margin is expected to remain above 10 percent.
In the new year, Continental expects to continue its 2012 success in achieving goals for main key financial performance indicators ahead of schedule, despite a partly difficult market environment.
Further, the company said it intends to further reduce net indebtedness in the year and keep the gearing ratio below 60 percent, despite the negative effects of changes in accounting regulations.
"With a record-setting €25 billion in incoming customer orders in 2012, the Automotive Group provided clear evidence of the growing trust customers place in us. For this reason, we look both to this year and the years beyond with confidence," added Degenhart.
On Frankfurt's Xetra, Continental shares are currently trading at 96.79 euros, up 2.90 euros or 3.09 percent.
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