Continental believes its troubled powertrain division could be profitable this year, one year earlier than originally forecast, finance chief Wolfgang Schaefer said.
“If the economic environment continues to develop as positively as it has for us in our automotive business, then break-even can be reached this year,” he told Reuters.
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The powertrain division, which makes fuel injection systems, was acquired from Siemens and is currently investing heavily in developing drivetrain parts for a French carmaker’s electric vehicles which means the division will “clearly” not be able to post an unadjusted operating profit this year, said Schaefer, without naming the company which observers suggest is Renault.
“We certainly won’t reach breakeven on a reported EBIT basis,” he added.
Schaefer also said that any merger plans with controlling shareholder Schaeffler would be not affected simply by his company’s balance sheet. Continental aims to achieve an investment grade rating excluding Schaeffler’s operations, by the end of 2012.
“If it makes sense to combine the businesses before then we will not make that dependent on how the credit ratings or debt level develops,” he said.
Earlier this week Schaeffler said it will be ready by the end of 2011 to merge with Conti in which it holds a 75% stake.
Last month Schaeffler transferred its assets, including its stake in Conti, into a new holding company, Schaeffler GmbH, to help attract lenders and investors. The German bearings maker has debt of around EUR12bn (US$15.6bn) as a result of its hostile takeover of Conti in 2008.
