Continental announced higher dividends after improved turnover in 2018

BERLIN, March 7 (Xinhua) -- Continental is planning to increase its dividend by 25 euro cents to a total of 4.75 euros per share after turnover increased by 0.9 percent to 44.4 billion euros (50.0 billion U.S. dollars) in the fiscal year of 2018, the company announced on Thursday.

Continental's net profits amounted to around 2.9 billion euros, still remaining near the previous year's record level of 3 billion euros."That is a solid result given the disappointing market development in the past year," remarked Wolfgang Schaefer, chief financial officer (CFO) of Continental.

The German automotive supplier met its annual targets for the fiscal year 2018. However, Continental had revised its business targets downwards twice last year, most recently in August due to lowered sales expectations, cost increases and warranty claims.

Share prices of Continental stocks almost lost half of their value last year and have only regained little of the 2018 losses since.

The German automotive industry was struggling to implement the new emissions testing procedure WLTP which led to significantly lower car sales in the second half of 2018. As Germany's most important automotive supplier, Continental's business suffered heavily as well.

Continental confirmed its preliminary forecast given at the beginning of 2019 for the current fiscal year and is still expecting sales of 45 to 47 billion euros, despite a "subdued start" of the 2019 fiscal year due to continuing market uncertainties.

"The guidance for 2019 is based in part on the assumption that the global production volume of passenger cars and light commercial vehicles will be stable at 94 million," emphasized Schaefer while adding that Continental's production in the first half of the year will probably be weaker than in the previous year.

Schaefer listed the "unclear situation" around Brexit among the risk factors for the development of Continental's fiscal year 2019.

Despite these risk factors, Continental is currently planning an initial public offering (IPO) of its powertrain division Vitesco Technologies in the second half of 2019. Preparations for the potential partial IPO would be "on schedule", the company announced.

"We want to provide for greater entrepreneurial freedom in a disruptive market environment, which will enable us to transfer the full force of our driving power to the road," said Elmar Degenhart, chief executive officer of Continental. (1 euro = 1.12 U.S. dollars)