Mercedes-Benz parent Daimler AG reported a steep drop in net profit in 2019, as charges stemming from diesel probes and other legal issues offset record sales of the company’s luxury vehicles.
Frankfurt-listed Daimler, the world’s biggest seller of high-end cars, reported a drop in net profit to just €2.7bn (£2.28bn, $2.95bn) for the whole of last year, down from €7.6bn in 2018.
The company also slashed its dividend to €0.90 per share, from €3.25 in 2018, as it pushes ahead with a shift towards electric vehicles.
Trade Daimler AG – DAI CFD
Unit sales for the group were broadly steady on the previous year, at 3.34 million vehicles, while sales for luxury brand Mercedes-Benz rose to a record 2.385 million vehicles, from 2.383 million the prior year.
The company, which took a €4.2-billion hit relating to investigations into the diesel-emissions scandal, as well as various legal matters, said it expected unit sales in its fiscal 2020 to fall slightly below those of 2019, but that it planned to quadruple its share of plug-in hybrid and fully electric vehicles in total sales.
“While our results in 2019 reflect ongoing strong customer demand for our attractive products, we cannot be satisfied with our bottom line. Above all, material adjustments affected our financial results last year,” said Ola Källenius, chairman of the Daimler board of management. “The future of the Daimler Group lies in CO2-neutral mobility as well as in consistent digitisation, leveraging its full potential in our products and our processes.”
With consumers increasingly seeking out more environmentally friendly vehicles and tighter carbon emissions standards around the world, Daimler said it would embark on a cost-cutting drive this year.
“Those measures include the significant reduction of material and administrative costs and the reduction of personnel costs by more than €1.4 billion by the end of 2022,” the company said. It added that restructuring measures and job cuts would have a negative impact on earnings in 2020.
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