The effects of the Covid-19 pandemic are forcing automotive supplier Hella (Lippstadt / Germany; www.hella.com) to extend its cost cuts. The company already drastically reduced personnel and material costs as well as planned investments in mid-March (see Plasteurope.com of 23.03.2020). Hella’s outlook now puts sales at only EUR 5.7-5.8 bn instead of EUR 6.5-7.0 bn for the current fiscal year (1 June 2019 to 31 May 2020). The adjusted EBIT margin is expected to be around 4%.

In the fourth quarter of fiscal 2019/2020, Hella will take into account non-cash impairment charges of around EUR 500m. These are mainly due to the significantly reduced market volume resulting from the coronavirus pandemic and result from the forecast that the global production volumes of passenger cars and light commercial vehicles will remain significantly below the outlooks made before the crisis in the medium to long term. The impairment will affect certain key financial figures, such as reported EBIT, net income attributable to shareholders and equity ratio, but it will not affect the adjusted EBIT margin, according to the company.

In view of the resulting net loss and overall negative market expectations, management has decided to ask the annual general meeting on 25 September 2020 to suspend the dividend payment for fiscal 2019/2020, despite good liquidity. Publication of the final results for the fiscal year is scheduled for 14 August 2020.