Daimler posts dramatic loss for 2009

AFP - [email protected]
Daimler posts dramatic loss for 2009
Photo: DPA

German auto giant Daimler suffered a sharp loss last year that surprised markets Thursday and pushed its share price lower as the group reported results from one of the auto sector's most challenging years.


Daimler posted a 2009 net loss of €2.64 billion ($3.6 billion), compared with a profit of €1.4 billion a year earlier.

"Last year brought many great challenges also for Daimler," a statement quoted chairman Dieter Zetsche as saying.

The group nonetheless "laid the foundations not only to overcome the upheaval affecting our industry, but to lead from a strong position. We are emerging from the crisis with plenty of torque," he stressed.

The group forecast 2010 pre-tax profit would be more than €2.3 billion but said it would not pay a dividend for 2009.

After pulling out of the red in the third quarter of 2009, Daimler plunged back into loss in the fourth quarter, with a net loss of €352 million.

The group suffered in particular from a collapse in sales of heavy trucks, a sector in which it is the global leader.

In the fourth quarter of 2008, Daimler had posted a net loss of €1.5 billion owing mainly to exceptional items stemming from its sale of the US car maker Chrysler.

Costs related to Chrysler trimmed another €294 million from Daimler's full-year pre-tax profit in 2009. Overall sales last year fell to €78.9 billion from €98.5 billion in 2008.

The latest results caught analysts by surprise, as they expected Daimler to announce a dividend of around €0.43 and a fourth quarter net profit of €277 million, according to a survey by Dow Jones Newswires.

Daimler said last month that unit sales had fallen by 10.1 percent last year to just under 1.13 million Mercedes-Benz, Smart city cars and other autos, as the global auto sector was slammed by an economic downturn.

In the fourth quarter however, those sales had gained 13 percent from the same period a year earlier.

Luxury car makers did not benefit as much as rivals from state subsidised car scrapping premiums, but saw sales improve towards the end of the year.

Asian markets were largely responsible for a second-half increase as demand grew for larger Class E and Class S autos and Daimler said the "ongoing solid growth of emerging markets such as China and India is exerting a positive influence."

Shares in the group plunged however by 7.88 percent to 30.44 euros in morning trades on the Frankfurt stock exchange, while the DAX index of German blue-chips was essentially unchanged overall.

In addition to the weaker than expected earnings, "the cancellation of the dividend is weighing on sentiment," one trader told Dow Jones.



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