Daimler hit by record pounds 2.5bn loss

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The Independent Online
Daimler-Benz, the giant car and truck-maker, is not paying a dividend to shareholders for the first time since 1950 after running up the biggest loss in German corporate history of Dm5.7bn (pounds 2.5bn).

The losses for 1995 included a hefty Dm5.1bn of restructuring costs, of which almost Dm4bn was attributed to electric and engineering unit AEG and at aircraft unit Daimler-Benz Aerospace (Dasa).

During 1995, Daimler announced it would sell AEG's core activities and absorb the remaining operations.

Dasa, which has already reported a record Dm4.3bn loss for 1995, added to its parent's problems earlier this year by announcing it would take a Dm2.3bn hit from Dutch aircraft unit Fokker, which went bankrupt last month.

Daimler said yesterday that it had tried to include almost every last piece of negative financial news in the 1995 figures, and believed the way was now clear for what may be a rapid recovery to "clear profitability" this year.

It added that its core businesses, car and truck-maker Mercedes-Benz and financial and computer services unit Daimler-Benz Interservices, were both successful in 1995. Together they account for 80 per cent of Daimler's revenues. "The show of strength of the last few months showed that the board has taken measures to offer Daimler-Benz shareholders an attractive return," said Juergen Schrempp, chief executive.

Analysts were sceptical, however, about the company's ability to recovery quickly. Daimler, which made a net profit of Dm895m in 1994, will give further details on its 1995 results in a week's time. The shares fell just Dm5.6 to Dm794.6, reflecting the fact that there were no new problems.