BERLIN (Reuters) – Continental announced on Wednesday a “controlled withdrawal” from Russia with the sale of its operations in the country and forecasts in 2023 an increase in margins thanks to a rise in sales.
On the Frankfurt Stock Exchange, Continental shares climbed nearly 5% in the morning.
Chairman of the management board Nikolai Setzer told a press conference on the annual results that the company was in the process of selling its operations in Russia, including its plant in Kaluga.
“The war [en Ukraine] is the reason for our controlled withdrawal from Russia. This means the sale of our activities, including our plant in Kaluga. We are at an advanced stage of the sales process,” he said.
While Continental suspended production at its Kaluga factory in Russia after Moscow began its invasion of Ukraine in February last year, the group temporarily resumed operations in the spring to protect local workers. , without giving further details.
Last year, Continental’s results were weighed down by asset write-downs of 87 million euros, negative exceptional effects of around 1 billion euros and high interest rates.
“The year 2022 was particularly difficult for us (…) The war against Ukraine has pushed up the prices of raw materials, semi-finished products, energy and logistics,” said Nikolai Setzer.
Continental expects a margin of 5.5-6.5% for this year, compared to 5% announced in January, on consolidated sales of between 42 and 45 billion euros, up from 39.4 billion in the last year.
Continental also expects cost increases of 1.7 billion for raw materials, energy, logistics and wages.
In 2022, the group recorded additional costs of 3.3 billion euros. Net profit fell to 67 million euros from 1.4 billion last year.
Global car production is expected to increase between 2% and 4% in 2023 according to the group, in line with forecasts made in January by the German automotive association. Auto production is still lower than it was before the pandemic.
(Report by Victoria Waldersee, Dina Kartit, edited by Blandine Hénault)
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