German auto parts company, Continental AG, said on Thursday that ongoing shortages of semiconductors severely slowed automotive production in its second quarter, as expected.
However, the rubber technologies group sector reported strong figures, due to the positive performance of the tire business.
“The chip bottleneck and rising raw material prices are set to weigh on the automotive industry throughout 2021,’’ Nikolai Setzer, Continental chief executive said.
Second quarter net income was 545 million euros (646.1 million dollars) compared to a loss of 741 million euros in the previous year.
Earnings per share were 2.72 euros, compared to a loss of 3.70 euros.
The adjusted earnings before interest and taxes (EBIT) was 711 million euros, compared to a loss of 635 million euros.
The adjusted EBIT margin was 7.2 per cent for the quarter.
Consolidated sales totalled 9.9 billion euros, up 49.7 per cent from last year.
Before changes in the scope of consolidation and exchange-rate effects, sales rose by 55.3 per cent.
The company noted that its prior year sales were impacted by the economic consequences of the first lockdown due to the COVID-19 pandemic.
From continuing operations, second quarter profit per share was 2.22 euros, compared to a loss of 2.64 euros in 2020.
Adjusted operating result from continuing operations was 518.3 million euros, compared to a loss of 467.7 million euros.
Sales from continuing operations increased to 8.35 billion euros, from 5.66 billion euros.
Continental was adjusting its outlook for the full year for continuing operations, thus excluding Vitesco Technologies.
The company now expects consolidated sales of around 33.5 billion euros to 34.5 billion euros, revised from prior guidance range of 32.5 billion euros to 34.5 billion euros.
The adjusted EBIT margin was anticipated at around 6.5 to 7.0 per cent, revised from prior guidance of 6 to 7 per cent.
For fiscal 2021, the company expected shortages of semiconductors to have a noticeable effect on automotive production.
After a production output of 74.6 million passenger cars and light commercial vehicles in 2020, Continental expects an increase of between 8 and 10 per cent for the year as a whole, updated from prior guidance of 9 to 12 per cent.(dpa/NAN)