Conti Hails ‘Record Breaking’ Second Quarter

Continental has released second quarter results which show a 28.5 per cent increase in group earnings (EBIT) and consolidated sales of 6.807 billion euros. “In the first six months, we made considerable progress towards our goal of achieving new top figures and are looking at the second half of the year with confidence,” said executive board chairman Manfred Wennemer.

In the first six months of 2005, consolidated sales rose 10.6 per cent to 6.807 billion euros compared with the same period last year (6.157 billion). Phoenix contributed 494.2 million in sales. At the same time consolidated sales increased by 4.1 per cent. EBIT was up 28.5 per cent reaching 687.3 million compared with 535.0 million the year before.

The Passenger and light Truck Tires division upped sales by 8.3 per cent to 2,081.2 million euros. Before consolidation changes and exchange rate effects, sales rose by 4.7 per cent. The results for the first six months of 2004 reflected expenses totalling 64.5 million euros for restructuring at the Mayfield plant. The change in the basis of consolidation resulting from the divisional reassignment of Continental Sime Tyre and income from license agreements had a positive effect on EBIT of 3.6 million euros in the first half of 2005. The division boosted its operating result (EBIT) by 49.2 per cent to 247.5 million euros (165.9 million the previous year) with the return on sales rising to 11.9 per cent.

“At present, we do not assume that we will be able to achieve our goal of breaking even in the US passenger and light truck tyres business in the fourth quarter of 2005,” said Wennemer, who currently heads the Passenger and Light Truck Tires division. One reason is that the market was more sluggish than expected. “The deviation from our target figures is not large, but many factors would have to turn out positively in order for us to just break even. At the same time, this shows that we are not in the middle of a catastrophic scenario, but rather that things are just progressing much more slowly than expected,” explained Hippe, president of Continen-tal Tire North America (CTNA) in addition to his other duties.

The Commercial Vehicle Tires division recorded an 8.8 per cent fall in sales to 651.1 million (714.0 million euros the previous year). Before consolidation changes and exchange rate effects, sales increased by 8.0 per cent. The change in the basis of consolidation resulting from the divisional reassignment of Continental Sime Tyre and income from license agreements had a negative effect on EBIT of 3.6 million euros. The division boosted its operating result (EBIT) by 8.5 per cent to 51.1 million, with the return on sales rising to 7.8 per cent.