Berlin (Reuters) – Thanks to a faster market recovery, Daimler was operationally in the black again in the third quarter and exceeded market expectations.
Business went well, especially in September, said the Stuttgart carmaker in a mandatory announcement on Thursday evening. According to preliminary figures, earnings before interest and taxes are 3.07 billion euros. Analysts surveyed by Refinitiv had expected an average of 2.14 billion euros. In the second quarter, Daimler had posted an operating loss of 1.7 billion euros due to the weak demand in the Corona crisis and costs for the conversion of the plants, but already saw signs of a sales recovery in July.
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Together with cost reductions initiated by the carmaker after weeks of production stoppages and lost sales due to closed car dealerships, the recovery in the third quarter was reflected primarily in a cash inflow (free cash flow) of 5.1 billion euros. In the second quarter this was still 685 million euros. According to the preliminary figures, the car subsidiary Mercedes-Benz achieved an EBIT of 2.1 billion euros in the third quarter, more than the analysts had estimated. At the beginning of October, Daimler announced that it would reduce fixed costs, investments and development expenditure in the passenger car business by more than 20 percent by 2025 compared to 2019. At the same time, the brand with the star is pushing ahead with expanding its range of electric cars with more than 20 all-battery electric models by 2030.
The Trucks & Buses commercial vehicle business and the Daimler Mobility division also performed better than expected in the third quarter, the group said. “In view of the development, Daimler expects a positive effect for the rest of the year,” said the mandatory announcement. However, only if there is no further corona lockdown. Accordingly, when the full quarterly figures are published on October 23, a new forecast for the year as a whole should also be given. So far, Daimler has assumed declines in unit sales, revenue and earnings compared to the previous year. Chief Financial Officer Harald Wilhelm estimated the operating result for 2020 at a low single-digit billion amount. However, around two billion euros in special effects, above all legal costs in the diesel exhaust scandal and for restructuring, are to be expected.