Pirelli Records First Half Improvement

Pirelli & Co SpA recorded a group net income of 131 million euros in the first half ended 30 June 2004. The figure is particularly impressive when it is compared with same time the previous year. In the first six months of 2003 the company had a net income of –21 million euros. In 2004 the group expects a significant improvement in results in all activity sectors, both at operating and net level.

In its first half results Pirelli recorded revenues of 3,573 million euros, reflecting an 8.3 per cent increase on the 3,298 million euro figure of the previous year. At the same time the company’s operating income grew 34 per cent from 142 million euros to 190 million euros.

In its tyre sector, Pirelli achieved sales amounting to 1.646 billion euros compared to 1.509 billion in the first half of 2003. Operating income totalled 154 million euros; an improvement of 19 per cent compared to the 129 million euros of the first half of 2003.

The tyre sector’s net financial position was negative by 375 million euros, compared -317 million euros at the end of 2003. According to the company the negative variation is mainly attributable to dividend payments of 85 million euros. Net financial position at 30 June 2003 was minus 570 million euros.

The group’s net financial position is recorded as being negative by 2,047 million euros, a figure the company says is in line with its targets taking into account industrial business seasonality, dividend payments and the exercise of the call option on telecom Italia shares.

On 26 August, after the first half officially ended, after receiving approval from the Italian Antitrust Authorities, Alcatel acquired what the company described as “certain Pirelli related assets” including intellectual property rights. At the same time Pirelli took a 5 per cent shareholding in Alcatel’s submarine business, with associated put and call options.