FRANKFURT, March 17 (Reuters) - German automotive cable and wiring system specialist Leoni has abandoned a 2019 profit target it issued just last month, unveiled job cuts as well as possible divestments and said its finance chief would quit.
“The company is facing a continued challenging market environment, particularly in China,” it said on Sunday, adding that demand from carmakers for its wiring systems had fallen significantly.
Leoni, which in February forecast 2019 earnings before interest and tax of between 100 million and 130 million euros ($147 million), down from 144 million euros in 2018, said it would no longer meet that target and would set a new goal.
As part of a restructuring plan it had already broadly outlined last year, the company said it would cut about 2,000 jobs out of more than 90,000 globally at the group.
“The developments at the end of fiscal 2018 and especially in the first two months of 2019 have made it clear that we must act even faster and more decisively to bring Leoni back on track,” Chief Executive Aldo Kamper, who joined in September, said in a statement.
He and his team would now consider all options for businesses with annual sales of up to 500 million euros.
The corporate structure would be changed to a financial holding company with two divisions that are managed on a stand-alone basis.
CFO Karl Gadesmann resigned with immediate effect, with CEO Kamper taking over his responsibilities until a successor is found, Leoni added.
Reuters reported in December that Indian car wiring maker Motherson Sumi Systems Ltd was in early talks with Leoni over a possible merger, citing people close to the matter.
$1 = 0.8832 euros Reporting by Ludwig Burger Editing by Ros Russell