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Hankook Results Counter ‘Lacklustre’ Analyst Expectations

Hankook recent record second quarter results contradict the negative predictions of some financial analysts that when Hankook Tire kicks off the second quarter earnings season for auto/auto part makers on 20 July, it will set the tone for a “lacklustre” set of results from the likes of Hankook, Kumho and Nexen. In an investor’s note dated 1 July 2010, Deutsche Bank research analyst Sanjeev Rana had commented: “We expect tyre makers such as Hankook and Nexen Tire to report in line or slightly below consensus results due to the burden of higher rubber prices.” It appears these reports failed to take into account the huge profit jumps of 501 per cent and 43 per cent in the first quarter 2010 from Hankook and Nexen respectively and an 18 per cent increase in sales from Kumho – all of which surprised analysts at the time.

23rd July 2010/by Tyrepress Editors

Dunlop Aircraft Tyres Celebrates Centenary with Book, Film Launch

Last night saw the celebration of Dunlop Aircraft Tyres’ Centenary take place in earnest following an open day and a visit to the company’s Fort Dunlop plant by The Duke of York, with the launch of a new commemorative book, the premiere of a film by artist Angus Boulton commissioned to celebrate the centenary and the introduction of a new corporate video. The venue for the prestigious occasion was The Wapping Project, London’s last Hydraulic Power Station, now regenerated as a post-industrial exhibition space and restaurant by Australian theatre director, Jules Wright.

20th July 2010/by Tyrepress Editors

Analysts: Increased Volume and Raw Material Costs, But ‘Robust’ 2Q for Tyre Majors

Market analysts at Morgan Stanley have predicted a “robust second quarter results season characterised by rebounding volumes and cost savings.” The volume of sales, which are reported to have improved from the low base of 2009, is said to be tyremakers’ biggest tailwind, but the increased cost of raw materials are also expected to kick-in in the manufacturers’ second quarter reports.

Raw materials are estimated to add a headwind of 300 – 440 basis points to the tyremakers’ margins, a trend that Morgan Stanley expects to accelerate through the rest of the year. Crucially, Morgan Stanley’s view is that while some of the numerous prices increases implemented up till now “are likely to feed through to the bottom line already,” they are note expected to cover more than a third of the input cost burden this quarter.

15th July 2010/by Tyrepress Editors

Paper: Continental Should Sell More Debt Soon

Continental AG should strike while the iron is hot and sell more debt while the market is in a receptive mood. That’s the view of The Wall Street Journal’s Michael Wilson, who explained in an article published today (14 July 2010) that the company needs the money to service its 8.2 billion euro syndicated credit facility, which is due to be repaid in August 2012:

“Since the start of this year, the company has been promising to issue bonds, the proceeds from which will be used to repay the facility. However, volatility in capital markets during the start of this year meant it was only last week that the company felt confident enough to actually launch a deal.”

14th July 2010/by Tyrepress Editors

Continental Shares Rebound on Improved Second Quarter Outlook

Shares in automotive supplier Continental AG “jumped” in response to the company upgrading its predictions for second quarter results on 2 July. While the full audited results for the second quarter and first half of 2010 are not due to be released until 29 July, according to first preliminary figures, unaudited sales for the first half of this year increased by about 38 per cent to approximately 12.5 billion euros compared with 9.063.2 million in 2009. On this basis, adjusted EBIT is expected to amount to at least 1.2 billion euros (2009: 248.8 million).

8th July 2010/by Tyrepress Editors

Analysts Expect ‘Lacklustre’ 2Q from Korean Tyremakers

When Hankook Tire kicks off the second quarter earnings season for auto/auto part makers on 20 July, it will set the tone for a “lacklustre” set of results from the Hankook, Kumho and Nexen, according to Deutsche Bank. In an investor’s note dated 1 July 2010, Deutsche Bank research analyst Sanjeev Rana: “We expect tyre makers such as Hankook and Nexen Tire to report in line or slightly below consensus results due to the burden of higher rubber
prices.”

7th July 2010/by Tyrepress Editors

Pirelli Tire North America Opens New York Sales & Marketing Office

Pirelli Tire North America (PTNA) has announced plans to expand its sales and marketing operations with a new office in New York City. According to the company, this office will complement its North American headquarters in Rome, Georgia. The expansion is intended to assist the company’s sales growth and will reportedly only involve “the outward facing parts of the sales and marketing departments.”

7th July 2010/by Tyrepress Editors

Stamford Tyres “Laid Foundations for Future Growth” in FY2010

Singaporean tyre and wheel distributor Stamford Tyres has announced a net profit of S$9.4 million (£4.5 million) for the end of financial year 2010, which ended on 30 April, over eight times the net profit of S$1.0 million in FY2009. The company’s president and CEO, Wee Kok Wah said: “Over the past year, we have worked hard to lay the foundations for the Group’s future growth… In accordance with the much improved set of results the Board of Directors has recommended a final dividend of 1.0 Singapore cents to reward our loyal shareholders.” The company reduced its operating expenses by 16.3 per cent, from S$64.5 million in FY2009 to S$54.0 million in FY2010, while Stamford experienced the slightest of declines in gross profit – down 1.5 per cent to S$66.5 million – and its gross profit margin, which was at 21.4 per cent as opposed to 22.7 per cent the previous year. Higher tyre purchase prices worldwide and lower sales from the Group’s Thai wheel plant were the main causes.

29th June 2010/by Tyrepress Editors

Stock Deals Shift Pirelli Ownership

Pirelli SpA’s ownership shifted over the weekend as the Malacalzu Group increased its stake in the tyre maker, reports Tire Review. The Genoa-based Malacalza Group boosted its stake in Pirelli by increasing its stake in Camfin – Pirleli’s largest shareholder – to 12.1 per cent, and plans to take a 30.9 per cent stake in GPI, which controls Camfin. With those moves, the Malacaza Group will effectively become Pirelli’s second largest shareholder. Pirelli Chairman Marco Tronchetti Provera revealed the stock plan in an interview published on 26 June.

28th June 2010/by Tyrepress Editors

Apollo Shares up Following Lockout Reassurance

Following news of the lockout at Apollo’s Kerala, India-based facility, shares in the company fell by around six per cent, but management reassurances that the company would make up the production deficit elsewhere and 85 per cent of the Perambra workforce wanted to return to work have pushed share prices to levels experienced prior to the lockout, according to financial news sources.

23rd June 2010/by Tyrepress Editors

Analysts Raise Conti Earnings Estimate 20%

Analysts at Deutsche Bank has upgraded Continental AG’s stock rating to “buy” after raising its earnings per share (EPS) estimates by more than 20 per cent for 2010 and 2011. According to the analysts the revision is entirely attributable to better volumes: “With car production in the second quarter close to the first quarter, our new second quarter adjusted EBIT estimate is 540 million (versus 400 million euros previously) and our full year adjusted EBIT is upgraded by 13 per cent to 1.87 billion euros (consensus: 1.75 billion).” Writing in an investor’s note published on 11 June, the analysts explained that this corresponds to an EBIT margin of 8.1 per cent and to an adjusted EPS of 3.9 euros, 8 per cent above consensus.

11th June 2010/by Tyrepress Editors

Dunlop Aircraft Tyres Welcomes Duke to Centenary Celebrations

Birmingham-based Dunlop Aircraft Tyres had a royal visitor today (7 June) when the company welcomed HRH The Duke of York to its head office and manufacturing site in Erdington. The company is celebrating its centenary this year. Prince Andrew toured the company’s offices, factory and testing facility, where new products are being developed for aircraft including the Embraer E-Jets family, the Airbus A320, the Eurofighter and Airbus Military A400M transport aircraft.

7th June 2010/by Tyrepress Editors

Tyre Shares Outperforming Automotive Stock

Shares in tyre manufacturers outperformed most of the various European OEMs’ stock between 26 April and the end of May, in the wake of the Greek debt crisis. That’s the verdict of Deutsche Bank analysts, who wrote that tyre manufacturer’s resilience has on the whole been supported by their aftermarket sales.

In an investor’s note published on 28 May, the analysts pointed out that share prices in general dropped by an average of 12 per cent, in line with the market, with “a significant discrepancy” in the automotive sector: “On one side, the share price of tyre companies (namely Michelin, Continental and Pirelli) and of German OEMs (BMW, Daimler, VW) has been very resilient. On the other side, mass market OEMs (Fiat, PSA and Renault) have underperformed massively,” the report read.

4th June 2010/by Tyrepress Editors

Pirelli Real Estate is Now Prelios

Pirelli Group’s board of directors has agreed to change the name of Pirelli Real Estate (the wing it recently decided to spin off) to Prelios. The change will take effect when the separation of Pirelli RE from Pirelli & C, is finalised. During the same announcement Pirelli also revealed that Enrico Parazzini has been appointed as the firm’s new managing director finance. This appointment follows the resignation of Claudio De Conto, who held the same position.

2nd June 2010/by Tyrepress Editors

2009 Was A “Banner Year” for Cheng Shin Rubber

Commenting on Cheng Shin’s recent rapid growth, Morgan Stanley’s Taiwan automotive industry analyst, Jeremy Chen, described the company’s 2009 financial results as “very strong.” In his words the results point to the booming Chinese tyre market and to the relative newcomer’s potential threat to existing tyre giants: “The strength and growth of local tyre makers actually are a growing threat to Michelin (for which Chinese sales are currently circa 5-10 per cent of overall sales). However, in reality there is probably room for everyone to grow in China at present…”

The company’s strong margins also garnered praise from the analysts: “We highlight that Cheng Shin's full year 2009 operating margin (20 per cent) remained well ahead of its peers' (12-15 per cent), providing more evidence of the company's strong competitiveness and execution capability. Although we expect margins and profits to fall this year, due to rising material costs, we retain an overweight rating on Cheng Shin, as we continue to see the stock as one of the best plays on China's booming auto market.”

17th May 2010/by Tyrepress Editors