Leoni Cuts Profit Outlook For 2014 - Quick Facts

(RTTNews) - Leoni AG (LNNNF), the German provider of cables and cable systems to the automotive sector, on Monday lowered its profits forecast for 2014 due to exceptional charges in the third quarter.

The company now expects to achieve in 2014, earnings before interest and taxes (EBIT) of at least 180 million euros instead of the previously projected figure of more than 200 million euros.

Based on provisional calculations, Leoni generated consolidated sales of 1.01 billion euros and EBIT of about 35 million euros in the third quarter. The main reason for this weaker performance in terms of operating profit involves heavy, unplanned charges arising from new product start-ups in the Wiring Systems Division, which already exerted an adverse effect in the second quarter. In total, exceptional costs reduced consolidated EBIT by about 15 million euros in the second and third quarters.

With the countermeasures applied taking effect, these earnings-reducing factors did not recur in the month of September, the company said. Leoni expects fourth quarter performance to be on-budget. But it will not be possible to compensate for the reductions of EBIT suffered in the summer months.

The company reaffirms its target of generating sales of about 4.1 billion euros in 2014. Its medium-term forecast also remains unchanged with sales of 5 billion euros and a 7 percent EBIT margin projected for 2016.