Continental’s recently published and extremly favourable half-year business results seem to have fired the imagination of analysts. After the German tyre manufacturer announced 9.9 per cent increase in turnover and a 21.4 per cent increase in EBIT, half a dozen company and market reports have been published arguing that Continental shares still have considerable development potential.
Analysts have reported that Cooper’s 2nd quarter results were better than they expected. The good results are said to be mainly due to improved performance from the Cooper tyre division. This is good news for the company because it is due to sell its Auto Parts division, making tyre production its core business.
Mitsubishi Chemical Corporation and Tokai Carbon Co., Ltd. are discussing the details of a possible joint venture.
The western European car market has moved in line with estimates from automotive market analysts Polk, to 5.6 per cent.
The Japanese and Korean manufacturers were way ahead of the rest, having now captured a 16.1 per cent market share. Ford also fared well with 10.5 per cent yoy, thanks to good sales volumes of its C Max.
Rubber and Steel price increases are making a negative impact on businesses across Europe, according to analysts. In the last six months businesses have seen steel prices nearly double from $350 a ton in January to more than $617 a ton in June. This rapid growth is widely acknowledged to have been cause by high levels of demand for raw materials from the Chinese market.
Analysts predict that strong results in the second quarter could ensure a 10% increase per share for Continental shareholders. However these positive results were already considered in previous forecasts suggesting a further upgrade is unnecessary.
Chinese car manufacturers produced 30.5% more cars in May than they did 12 months ago. In May China produced 215,000 vehicles, 10.2% less than in April. Compared with previous growth rates, 30% looks relatively meager. In April 2003 production went up more than 42% and February 2003 saw a staggering 62% increase. To put number this into perspective, figures for March show that UK car production rose by only 7.4% to 163,123 units.
The 8th Moscow international specialised exhibition for the tyre and rubber industry will take place at the Expocentre, Moscow from the 1st to the 4th of February 2005. With analysts predicting an annual growth rate of between 15 and 20 percent over the next 4 years the Russian tyre market presents fertile ground for investment and commercial evelopment. This show serves as a shop window and offers a meeting forum for Russian and international companies.
For further information contact:
Alla Shevchenko
Maxima International Exhibitions
Office 219
3, Profsoyuznaya Street
Moscow 117036
Russia
Tel: +7 095 1247760
Fax: +7 095 1247060
Email: shevchenko@maxima-expo.ru
Web: www.maxima-expo.ru
Goodyear has announced record sales of US$ 15.1 billion for 2003 and a net loss of US$ 802 million. Turnover in 2002 was $13.9 billion and the net loss $1.227 billion. $750 million of the increase in turnover came from favourable currency exchange rates. The company’s performance in Europe (both east and West) was satisfactory and, while Goodyear chief Keegan was very optimistic during a conference with analysts, but he had to admit that the much-needed turnaround in North America had not taken place as expected. In 2002 the corporation had to pay $241 million in interest and this sum escalated to 293.6 million last year.
Analysts MorganStanley have upgraded Nokian shares from “Underweight-V” to “Equal Weight-V”. This follows good first quarter financial figures and the company’s reorganised strategy to pursue growth in the Russian tyre market, which involves investing 52 million Euro in building a new factory near St. Petersburg.
Greater demand from customers and increased production in lower-cost areas helped raise Continental’s first quarter profits by 48 per cent – far higher than expected. 1Q net income was 129.5 million Euro (1Q 2003: 87.4 million), which was nearly 30 million Euro higher than predicted by industry analysts. Turnover for the period was up slightly too; from 2.82 billion Euros in 1Q last year to 2.99 billion Euros in the first three months of 2004.
Industry analysts are cautiously optimistic about prospects for the tyre industry, following good sales in January and February. In Europe, there was year-on-year growth of 8.4 per cent in the passenger car tyre replacement market and in North America, 5 per cent growth. Some of this is down to pre-buying ahead of price increases and the analysts predict an increase in sales for the year of 4 per cent. The European truck tyre replacement market is up 8 per cent. More good news for the manufacturers; price increases seem to be sticking and in the US were up over 5 per cent YOY in February.
DaimlerChrysler (DCX) has ruled out giving any further financial support to Mitsubishi (MMC), in which the German company has a 37 per cent stake. This surprised analysts, who had been expecting DCX to invest up to 4 billion Euro, but is seen as a positive move with a beneficial effect on DCX cash flow.
Goodyear has fired three of its European managers, obviously holding them responsible for what the company calls accounting errors. Scialom (Vice President Finance Europe), McKnight (Managing Director Sales Countries) and his finance manager Loysen have bitten the dust. As far as it is known the three were given no reason for the notice, at this stage. Spokesmen for the group even refused to comment as to whether the three had been fired or had taken retirement. Goodyear is under formal investigation by the SEC and had to inform the public yesterday yet again, that it had found more accounting errors in the US, in the region of 16 million US dollars. Analysts are now concerned that Goodyear could be too busy dealing with these alleged improper actions instead of leading the company into a much needed turnaround.
When Bridgestone bought 19.6 per cent of the Nokian share capital from the then parent company Nokia for 39.17 Euro per share, paying a total of 78 Million Euros, analysts recommended Nokian shares as “Hold”, saying the fair value was approximately 34 Euro and pointing out that Bridgestone paid a premium on top of this. Investors who did not listen but bought Nokian shares anyway are now much better off. They made a fortune due to the fact that Nokian was able to more than double the share price to the current 71 Euro, giving Nokian a market capitalisation of about 780 Million Euros. Nokian made a turnover of 528.7 million Euro last year and managed an operating profit of 79.1 million Euro, which led ultimately to a net profit of 47.6 million Euro. Nokian Tyres is by far the best earning tyre company in the world.
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