BERLIN, June 28 (Xinhua) -- German lighting manufacture Osram issued a further profit warning on Thursday as its main customers from automotive industry experienced difficulties caused by new environmental regulations and trade conflicts.
It was already the second time that the Munich-based company downgraded its earnings forecast for 2018. The price of Osram shares listed on the DAX stock exchange subsequently collapsed by up to 18 percent in Thursday trading.
Osram achieves around half of its gross revenue and the bulk of its profits by producing lighting technology and sensors for automobiles. As a consequence, the company is highly exposed to logistical and financial struggles currently experienced by German carmakers under a new exhaust emissions-testing regime.
Major corporations like Volkswagen and Daimler have still not obtained approval for all of their models in accordance with the Worldwide Harmonized Light Vehicles Test Procedure (WLPT) which will become legally-binding in the European Union (EU) for all newly-registered cars as of September 2018.
Daimler has reacted to the increasing time pressure by issuing a profit warning of its own, while rival Volkswagen announced that there will be involuntary downtime at its Wolfsburg plant to cope with the regulatory backlog.
Osram chief executive officer (CEO) Olaf Berlien told press on Thursday that WLTP standards had created uncertainty in the entire German automotive industry. Chief financial officer (CFO) Ingo Bank further pointed to the growing threat of a trade war sparked by the protectionist policies of U.S. President Donald Trump as weighing on the company's international sales.
Osram already issued a profit warning to investors in April in which it cited a "general weakness in the lighting market" to justify the decision. The company said that it would lower its administrative cost and adjust its manufacturing base to focus more on software solutions and parts for LED technology in response to the trend.
Osram employs 7,000 staff across Germany. The firm's latest corporate earnings figures for the third quarter of 2018 (Q3) are scheduled to be released on August 1.
