Daimler slashes its dividend following third profit warning

FILE PHOTO: The Daimler AG sign with raindrops is pictured before the company’s annual news conference in Stuttgart, Germany, February 4, 2016. REUTERS/Michaela Rehle/File Photo

STUTTGART, Germany (Reuters) – Daimler (DAIGn.DE) cut its dividend on Tuesday to 0.90 euros ($0.98) a share after 2019 earnings more than halved, weighed down by restructuring and legal charges in what amounts to the third profit warning for new Chief Executive Ola Kaellenius.

The German carmaker cut its dividend proposal from 3.25 euros a share in 2018.

Daimler said its net profit fell to 2.7 billion euros, down from 7.6 billion euros in the year earlier, despite record deliveries of Mercedes cars that saw the brand retain its title as the world’s top-selling premium automaker.

The Stuttgart-based carmaker said it would seek to cut administrative and personnel costs by more than 1.4 billion euros by the end of 2022 to help offset expenses from legal proceedings and investments in new technologies.

Daimler said it had booked charges of 4.2 billion euros related to diesel probes and legal proceedings, as well as 828 million euros in restructuring expenses in its vans division, after Mercedes scrapped its X-Class pickup truck.

A further 405 million in charges hit earnings after Daimler restructured its mobility services unit, the carmaker said.

Earnings before interest and taxes (EBIT) dropped to 4.3 billion euros from 11.1 billion in 2018. Net profit dropped to 2.7 billion euros from 7.6 billion euros in the same period a year earlier.

Mercedes-Benz will launch an electric A-Class and an electric van this year, keeping investments into property, plants and equipment and research and development expenses at roughly the same level the previous year, Daimler said.

“Our goal is to ensure solid net liquidity to protect the necessary investments, and at the same time to pay attractive dividends,” Chief Financial Officer Harald Wilhelm said.

Reporting by Edward Taylor; Editing by Michelle Martin and Edmund Blair

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