By Olivia Bugault 
 

Continental AG said Wednesday that it is withdrawing its 2020 guidance as the coronavirus pandemic has already significantly hit its first-quarter results.

More than 40% of Continental's production sites world-wide have temporarily stopped operations, with its automotive and tires divisions being particularly badly hit, the German automotive-parts manufacturer said.

"Given the uncertainty around the duration of the disruptions, as well as the difficulty in gauging possible further consequences on production, the supply chain and demand, the executive board of Continental has decided to withdraw the outlook for fiscal 2020," Continental said.

Continental warned of the financial effects of the coronavirus on its first-quarter results and said it expects consolidated sales to be roughly 9.4 billion to 9.8 billion euros ($10.33 billion-$10.78 billion). The company said its adjusted earnings before interests and taxes margin should come in at around 2% to 3% for the period.

At its automotive divisions, sales should be around EUR5.7 billion to EUR5.9 billion, while the adjusted EBIT margin should be roughly 0%, it said.

The company said it has been implementing cost-cutting measures to mitigate the effects of the pandemic. Measures include cutting wage and salary costs as around 30,000 of its employees are doing short-time work in Germany.

Continental said it has EUR2.3 billion in liquidity and around EUR4.6 billion in unused credit lines.

 

Write to Olivia Bugault at olivia.bugault@wsj.com

 

(END) Dow Jones Newswires

April 01, 2020 03:44 ET (07:44 GMT)

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