Weak 2018 sees Daimler boss Zetsche leave on sour note

7 February, 2019 12:00 AM printer

STUTTGART: Daimler on Wednesday reported its worst year since 2015 as trade tensions and costly investments drove a slump in profits, months before chief executive Dieter Zetsche relinquishes the wheel at the Mercedes-Benz maker.

"Last year was difficult," Zetsche told reporters at a Stuttgart press conference, in one of his final major appearances before his long-planned departure in May, reports AFP.

Net profits at the Stuttgart-based group tumbled 29 percent to 7.6 billion euros ($8.7 billion) last year, short of predictions from analysts surveyed by Factset.

Daimler said profits were sapped by massive investments in developing new models and new technologies like electric and autonomous vehicles.

Other headwinds included a production slowdown linked to new diesel emissions tests in the European Union, the US-China trade confrontation and provisions linked to "dieselgate".

The cloudy outlook had already prompted Daimler to slash its operating profit forecast twice over the course of 2018.

In the end, the figure dropped 22 percent, to 11.1 billion euros.

The group booked lower profits despite pumping up unit sales 2.0 percent, to 3.3 million vehicles, with similar growth in revenues, to 167.4 billion euros.

Daimler's Mercedes-Benz cars and vans divisions weighed on the bottom line, with operating profits falling 18 percent and 73 percent respectively.

Both arms suffered "expenses in connection with ongoing legal proceedings and measures taken for diesel vehicles," as the group was forced to recall 774,000 vehicles for refits when German authorities discovered software capable of deceiving emissions tests.

Meanwhile the emissions tests known as WLTP introduced in September across the EU disrupted Daimler's production chains.