FRANKFURT — ZF Friedrichshafen said its first-half operating profit margin narrowed due to currency headwinds and higher steel and aluminum prices, as a global trade dispute weighed on earnings.
ZF said earnings before interest and taxes fell to 1.06 billion euros ($1.24 billion), down from 1.2 billion a year earlier, citing higher raw material prices, currency effects and high research and development spending.
As a result, the German supplier’s EBIT margin fell to 5.7 percent, from 6.6 percent a year earlier.
“Even if conditions become somewhat rougher in the second half — especially due to impairments of free trade — we are sticking to our forecast,” CFO Konstantin Sauer said in a statement.
For the full year, ZF expects sales of 36.5 billion euros, an EBIT margin of 6 percent and a free cash flow of at least 1 billion euros.
As part of an ongoing trade dispute, the United States last week agreed to suspend hostilities over tariffs with Europe in a fragile deal that may clear the way for renewed pressure on China.
ZF is looking for ways to expand its software and autonomous driving expertise, including through acquisitions.
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