13 de octubre de 2014 / 18:56 / en 3 años

UPDATE 1-Leoni cuts outlook on costly new production line in Mexico

* Now sees EBIT of at least 180 mln euros

* Previously expected more than 200 mln euros in EBIT

* Cost overruns in setting up new production line in Mexico (Adds details on costs, analyst estimates for Q3 results)

By Ludwig Burger

FRANKFURT, Oct 13 (Reuters) - German automotive cable and wiring systems supplier Leoni AG cut its full-year earnings outlook on Monday, citing cost overruns related to a new production line in Mexico.

The group said it now expects earnings before interest and taxes (EBIT) of at least 180 million euros ($228 million), compared with a previous projection of more than 200 million euros.

“The principal reason for this weaker performance in terms of operating profit involves heavy, unplanned charges arising from new product start-ups in the Wiring Systems Division, which already exerted an adverse effect in the second quarter,” Leoni said.

A spokesman pointed to remarks made by Chief Executive Klaus Probst in August during a media call discussing second-quarter earnings.

Probst at the time said setting up production facilities to make wiring systems for a German premium carmaker in Mexico had led to higher-than-expected costs for training employees and for air freight. It had previously only produced supplies for U.S. truckmakers in Mexico.

The company added it had managed to get the project back on budget in September with no further charge to be booked for the fourth quarter.

It also reported third-quarter sales of 1.013 billion euros and EBIT of about 35 million euros, citing preliminary results.

Analysts on average were expecting 1.008 billion euros in sales and 48 million euros in EBIT, according to Thomson Reuters data. ($1 = 0.7889 euro) (Reporting by Ludwig Burger; editing by David Evans)

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