Pirell posts strong results, raises forecasts

ERJ staff report (DS)

Milan, Italy -- Pirelli group posted 17 percent higher sales and 50 percent higher profit for the six months to 30 June. The company also said its full-year results wil be better than previously forecast. Pirelli Tyre results reflected this positive performance.

Pirelli Tyre reported revenues of euro 2,760.9 million, an increase of 18.7 percent compared with 2,325.3 million euros reported in the same period in 2010. On a like-for-like basis, growth in the first half was 19.4 percent, with a positive contribution from the volume component (+3.5 percent), and the price/mix component (+15.9 percent) against the negative impact of 0.7 percent from the exchange rate component. The gross operating margin (Ebitda) before restructuring charges was 427.9 million euros, an increase of 32.1 percent compared with 323.9 million euros in first half 2010, growing as a percentage of sales to 15.5 percent from13.9 percent on 30 June 2010.

The operating result after restructuring charges amounts in the first half to 312.5 million euros (320.2 million euros before restructuring costs), an increase of 43.8 percent compared with 217.3 million euros on 30 June 2010, growing as a percentage of sales to 11.3 percent compared with 9.3 percent in first half 2010.

Pirelli said the improved result was achieved thanks to the positive impact of the commercial variables, in particular the price/mix component, and the continual optimization of efficiency of the industrial activities, which saw, among other things, an increase in production capacity. These elements more than offset the negative impact of increased raw material costs, approximately 212 million euros, of which 130 million solely in the second quarter.

In the Consumer (Car and Mototyres), revenues in the first half were 1,942.2 million euros, an increase of 20.1 percent from 1,616.7 million euros in first half 2010, to which sales' volume increases contributed 5.7 percent and the price/mix component 15.4 percent. The operating result was 241.1 million euros, an increase of 63.7 percent from 147.3 million euros in first half 2010 and equal to 12.4 percentof revenues (9.1 percentin the same 2010 period).

In the Industrial (Industrial Vehicle tyres and Steelcord)i business, total revenues were 818.7 million euros, an increase of 15.5 percent from 708.6 million euros in the same 2010 period, while the operating result totaled 71.4 million euros (70 million in first half 2010), equal to 8.7 percent of sales (9.9 percent in first half 2010).

Pirelli Tire expects total consolidated revenue for the year to exceed euro 5800 million, while the ebit margin is likely to be between 10 percent and 11 percent, based on lower-than-predicted raw material price rises.

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Press release from Pirelli