Pirelli’s Q1 2015 net profit up 12.2% to €101.4 million

First quarter revenues at Pirelli & C. S.p.A rose 6.5 per cent year-on-year to €1,473.2 million, the tyre maker reports; excluding a 4.1 per cent positive foreign exchange effect, revenue growth amounted to 2.4 per cent. EBIT rose 4.5 per cent year-on-year in the three months from 1 January to 31 March 2015 to €210.1 million, while EBIT margin reduced from 13.6 per cent to 13.4 per cent. Pirelli notes that the EBIT margin before restructuring charges was 13.6 per cent, compared with 14.0 per cent a year earlier. Net profit for continuing operations increased 12.2 per cent year-on-year in the first quarter to €101.4 million.

Tyre business revenues rose 6.5 per cent to €1,469.5 million during the reporting period, with revenues from products Pirelli classifies as ‘premium’ (tyres with a rim diameter of 17-inches and above) rising 13.6 per cent to €726.9 million. Price/mix improved by 3.7 per cent as a result of this premium segment performance. Total volumes declined by 1.3 per cent – the 6.7 per cent decrease in the industrial business more than cancelling out a 0.4 per cent growth in consumer volumes – due to declining markets in Latin America and Russia. Tyre business EBIT increased 4.1 per cent to €213.3 million, while EBIT margin declined from 13.9 per cent on 31 March 2014 to 13.6 per cent a year later. EBIT margin before restructuring charges decreased from 14.3 per cent to 13.8 per cent.

Pirelli reports that premium volumes grew more than ten per cent year-on-year, and in the first quarter of 2015 accounted for around 59 per cent of consumer revenues, two per cent more than a year earlier. The company expects its consumer business to improve over the course of 2015, thanks to positive premium segment performance; growth here will be supported above all in emerging markets and North America, and by exchange rate improvements. This performance will compensate the weakness of the industrial business, which is particularly accentuated in the Latam region.

The full-year Targets Pirelli announced in February were confirmed upon the release of the Q1 2015 results: Pirelli anticipates an EBIT equal to approximately €930 million after restructuring expenses of about euro €40 million, revenue growth of between 6.5 per cent and seven per cent at approximately €6.4 billion, investments below €400 million and cash generation before dividends equal to or above €300 million before disposal of the steelcord business. The targets foresee a net financial position at the end of 2015 of about €850 million.

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