NUREMBERG (dpa-AFX) - Leoni AG (LEOGN) reported that, it incurred preliminary sales of 1.2 billion euros and a negative EBIT of 19 million euros, for the fourth quarter of financial year 2018. In the 2018 financial year, the company generated preliminary sales of 5.1 billion euros, and EBIT of 144 million euros. For the financial year 2018, the company previously estimated sales of about 5.0 billion euros, and EBIT of approximately 196 million euros.
'Our 2018 result is very disappointing and unacceptable. The issues are significantly more serious than previously evident and the surprisingly negative development in the fourth quarter, particularly in our Wiring Systems division, highlights the necessity for a comprehensive performance program,' said Aldo Kamper, President and CEO of Leoni AG.
Based on the preliminary results for the financial year 2018 and the current market environment, the Board of Directors projects sales of about 5.2 billion euros for 2019. Due to a higher burden, primarily from project ramp-up costs in Mexico, before adjustments from the performance and strategy program Value21, Leoni forecasts an EBIT between 100 million euros and 130 million euros and free cash flow (incl. IFRS 16-related adjustments) at the level of 2018. Based on these expectations for 2019, the company said it will not meet the previous medium-term targets for 2020.
Also, Leoni AG decided to propose to shareholders at the 2019 Annual General Meeting to suspend the dividend for the financial year 2018.
'We are immediately implementing a stricter cost discipline at the Company. We will define and implement further measures in the coming weeks and will provide more details on these on 19 March,' Kamper added.
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