Citing “recent developments” as a cause Daimler has “reassessed” its full year 2018 profit forecasts for Mercedes-Benz Cars, Daimler Buses and the group as a whole.
“The main factor is an increase in expected expenses in connection with ongoing governmental proceedings and measures in various regions with regard to Mercedes-Benz diesel vehicles,” Daimler said in a statement late on Friday (19 October).
Mercedes-Benz Vans would book lower unit sales due to delays in vehicle deliveries.
“Furthermore, against the backdrop of a recent ruling by the European Court of Justice, provisions have been recognised for the potential need to take action on certain vehicles still operating with the previously used [air conditioning] refrigerant R134a,” Daimler added.
“Additionally, Daimler Buses records decreasing demand in some markets.”
“The aforementioned factors have been taken into account in the results of operations for the third quarter. As a result, earnings are now significantly below market expectations.”
Third quarter EBIT profit for all group units to will fall to EUR2,488m from EUR3,409m a year ago.
Individual division EBIT is now forecast at:
- Mercedes-Benz Cars: EUR1,372m (versus Q3 2017: EUR2,105m)
- Daimler Trucks: EUR850m (EUR614m)
- Mercedes-Benz Vans: loss of EUR93m (EUR214m profit)
- Daimler Buses: EUR30m (EUR32m)
- Daimler Financial Services: EUR392m (EUR508m)
Free cash flow for the three quarters will total negative EUR60m versus EUR5,771m in black ink in 2017.
Daimler now expects full year 2018 EBIT of:
- Mercedes-Benz Cars: significantly below last year
- Daimler Trucks: significantly below last year (unchanged)
- Mercedes-Benz Vans: significantly below last year (unchanged)
- Daimler Buses: significantly below last year
- Daimler Financial Services: significantly below last year
- Daimler Group: significantly below last year
The free cash flow forecast was unchanged.