FRANKFURT -- Continental will push back the spinoff of its powertrain division until next year, the company said Friday when it reported a 17 percent drop in first-quarter operating profit, hit by a downturn in car demand and higher investments.
The supplier said it would update capital markets towards the end of this year about the partial float of the recently formed division, which it has named Vitesco Technologies.
"Depending on market conditions, this can be expected from 2020," Continental said.
The delay marks the second time a high-profile listing has been delayed in Germany this year, after Volkswagen Group in March postponed listing its truck division until market conditions improve. Steel maker Thyssenkrupp is also reviewing plans to split its business in two as market conditions deteriorate.
Continental's earnings before interest and taxes (EBIT) fell to 884 million euros ($984 million) in the first quarter, compared with 1.066 billion euros a year earlier, even as sales remained flat. Releasing preliminary results before its annual shareholders meeting, Continental said its adjusted EBIT margin fell in the quarter to 8.1 percent from 9.7 percent a year ago.
Continental CEO Elmar Degenhart said "Global car production was down substantially at the beginning of the year, as expected."
The supplier said it expected a market upturn in the second half of the year and confirmed the outlook it gave in January: an adjusted EBIT margin of 8 to 9 percent this year, instead of last year's more than 9 percent.