German automotive supplier Continental reported a 42.4% drop to its earnings before interest and taxes in the third quarter as a global semiconductor shortage dampened car production.
Earnings fell to 419 million euros ($484.11 million), with an adjusted EBIT margin of 5.2%, a company statement showed.
Its automotive technologies division was particularly hard hit, reporting a loss to earnings before interest and taxes (EBIT) of 81.5 million euros, while the rubber technologies division remained profitable with an adjusted EBIT of 496.5 million euros despite rising logistics and energy costs.
While the company said it believed the semiconductor shortage had reached its peak in the third quarter, the negative effects of rising costs of energy, logistics, and raw materials would continue to drag down profits into next year.
Continental said in October that it expected global light vehicle production in the 2021 fiscal year to be within 1% above or below 2020 levels, prompting the company to lower its forecast for its annual adjusted EBIT margin to between 5.2% and 5.6% from a previous estimate of 6.5% to 7%.
Global auto production fell around 20% from last year’s levels in the third quarter to 16.5 million units, Continental said, with Europe seeing a particularly steep drop of 30%.
