DaimlerChrysler AG said on Wednesday a tougher business climate this year will make it harder to raise profits as planned, despite encouraging signs in the first quarter, Reuters reported.
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DaimlerChrysler said in February it aimed to lift its adjusted operating profit this year from last year’s level of 5.8 billion euros ($US6.14 billion), provided economic conditions remained stable, Reuters noted.
“It has become much more difficult to reach the targets we have set ourselves… nonetheless we will make every effort to achieve them,” chief executive Juergen Schrempp told shareholders at the group’s relatively subdued annual meeting attended by about 8,500 investors, Reuters said. “Obviously not everything always works to perfection… the environment will remain very challenging for us this year,” Schrempp reportedly added.
Reuters said shares in DaimlerChrysler have fallen about 4% so far this year, outperforming the European autos index, which has lost around 12%.
But the stock has lost two thirds of its value since the 1998 merger of Chrysler, then the most profitable US car maker, and German industrial jewel Daimler-Benz, hailed by the company as a “merger made in heaven”, Reuters said.
According to the news agency, DaimlerChrysler said its forecast was based on the assumption that the war in Iraq would be concluded soon and that there would be no more factors that might have a harmful effect on the world’s economies relevant to its business.
DaimlerChrysler also claimed its luxury Mercedes unit, expected to post flat profits this year, had made a good start to the year and its trucks division had held up well, the Reuters report said.
