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Continental profit drops as shareholders discuss revamp
[BERLIN] German automotive supplier Continental on Friday reported lower-than-expected quarterly underlying profit on exchange rate effects, sticking with expectations that currency headwinds could dent revenue by more than 1 billion euros (S$9.57 billion) this year.
Adjusted earnings before interest and tax (EBIT) declined 9 per cent to 1.06 billion euros from 1.16 billion a year earlier, close to the 1.05 billion-euro bottom-end forecast in a Reuters poll of banks and brokerages.
Shares in the Hanover-based group were trading down 0.8 per cent at 223.70 euros as of 0735 GMT.
The company last week scaled back its profitability outlook for 2018 on expectations that currency headwinds and inventory valuation would inflict a 150 million euros negative hit to first-half earnings.
The auto parts and tyre maker now expects the adjusted EBIT margin to come in at above 10 per cent after previously guiding for around 10.5 per cent, compared with 10.9 per cent last year.
Continental is also holding its annual general meeting on Friday, with investors expected to seek more clarity from management on a possible structural overhaul that could include listing or spinning off divisions.
The company has been in talks with banks about a possible structural revamp that experts say could result in forming more independent units for its powertrain, electronics and rubber operations.