Daimler expects new diesel charges of up to €1.5bn in 2019
The diesel emissions scandal continues to take the shine off Daimler's annual resultsEuropost
Mercedes-Benz parent company Daimler AG said Wednesday that additional charges related to diesel emissions would weigh on its 2019 profits by between €1.1 and €1.5bn.
In preliminary financial results, it said operating profit not including the "anticipated additional expenses for ongoing governmental and court proceedings and measures relating to Mercedes-Benz diesel vehicles" amounted to €5.6bn euros last year, down from €11.1bn in 2018 The effect would mean the 2019 results as a whole would fall "below earnings expectations," Daimler added.
The news pushed Daimler's stock to the bottom of the blue-chip DAX index around 9:45 am in Frankfurt (0845 GMT), falling 0.5 percent to €46.18.
The Stuttgart-based group had already warned earlier that operating profit would be "significantly below" the 2018 figure, even though 2019 revenues would be "slightly above" the previous year's total of €167.4bn. But even without the new charges, the vans division is estimated to have made an operating loss of €2.4bn. In addition, preliminary operating profit at the cars division was slashed almost in half, to €3.7bn compared with €7.2bn in 2018.
Daimler was forced to set aside €4.2bn euros of provisions in April-June last year, covering a massive recall of cars allegedly fitted with software to cheat emissions tests. The charge pushed it into its first quarterly loss in 10 years in the second quarter.
So far, German motor vehicle authority KBA has ordered that almost one million Daimler vehicles must be recalled, but the carmaker says none of the "motor control functions" highlighted by officials are illegal. The company nevertheless agreed to pay an 870-million-euro fine in September for having sold vehicles that did not conform with legal emissions limits since 2008.