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Hankook Tyre, reported in NZ News, says that its operating profit jumped 21.7 per cent in the third quarter from a year earlier, fueled by brisk overseas sales of its ultra-high performance (UHP) tyres. Operating profit reached 219.6 billion won (US$ 201 million) in the three months ending Sept. 30, up 21.7 per cent from the same period last year.
On 25 October Czech rubber company CGS Holding a.s. announced that it has acquired the rubber manufacturing division Savatech, d.o.o., and related assets from Sava, d.o.o., which is based in Slovenia. Savatech makes motorcycle tyres, rubber compounds and components for home appliances and the automotive industry, among others. According to the company, Savatech has eight sales subsidiaries, and in 2011 it had consolidated revenues of 123.2 million euros. CGS’s consolidated sales were 537.1 million euros in 2011. No details of how much was paid were released in the sale announcement.
While financial analysts were not more than satisfied with what they characterised as an “in-line” set of third quarter financial results from Continental AG, a spell of cold weather could be just the tonic for the German tyre maker which is strong in winter tyre sales.
At the close of last week, Goodyear Tire & Rubber Company reported results for the third quarter of 2012 showing improved North American operating of US$130 million (up 67 per cent year-on-year), but also significant volume decline (down 12 per cent year-on-year).
As part of its third quarter/nine month financial results, global tyre manufacturer Michelin also published its latest tyre demand details, which give a view on how markets are performing in different segments in various parts of the world. The figures are broken down by region and segment and are then split by OE and replacement market demand.
Financial analysts welcomed the relative good news of Michelin’s third quarter/nine-month results, which saw sales rise despite lower volumes and followed profit warnings from Nokian and Delticom respectively in the week before. As a result Deustche Bank upgraded its operating profit expectations to 2.55 billion euros, 9 per cent above consensus.
Michelin has reported sales of 16.142 billion euros in the first nine months. The figure, which represents a 6 per cent increase compared with the same period last year, comes despite slow demand and continued pressure in the economic environment especially in mature markets. However, despite the increase, sales volumes were down 6.7 per cent, with the overall improvement being explained by product mix and raw materials-related price increases.
While announcing its five-year business management plan in which it expects to spend 280 billion yen ($3.3 billion) in calendar year 2013 to expand tyre capacity in emerging markets, Bridgestone Corp. also said it aiming at annual sales growth of 5 per cent and 10 per cent operating income ratio, the tyre manufacturer said it would seek diverse sources of raw materials and combine products and services in pursuit of its goals.
Following Delticom’s announcement of a profit warning, financial analysts have issued a warning of their own – Delticom AG could now witness market watchers slash their 2012 earnings estimates for the company by around 30 per cent.
Delticom has reported revenues of 280.4 million euros in the first three quarters of 2012, down some 5.8 per cent compared with the previous year. The preliminary results show that pre-tax profits (EBIT) amounted to 17.5 million euros, which suggests this figure fell by around a third compared with last eyar. By comparison, in the first nine months of 2011 revenues increased by 15.8 per cent to 297.7 million euros and EBIT by 23.3 per cent to 28.2 million euros. As a result of the “challenging market environment” Delticom warned investors that it is scaling back its EBIT goal for the current financial year to 7 – 8 per cent.
With tyre demand said to be down between 2 and four per cent, financial analysts at Deutsche Bank confidently reported that the tyre companies under its coverage “should record strong results in the third quarter due to a still positive pricing environment”. Or in other words because manufacturers are said to be doing their best to maintain prices. And this is said to be coupled with a reported raw material tailwind.
Shares in Nokian Tyres fell by as much as 12 per cent following a profit warning issued by the company today (16 October 2012). According to Bloomberg, the fall was the biggest drop since 5 August with prices tumbling to 29.94 euros (down 11 per cent) as of 15:08. But it didn’t stop there and instead the market experienced a degree of negative contagion following this news and similarly gloomy demand projections from European tyre makers.
Cafmin, the holding company which is currently controlling shareholder of Italian tyremaker Pirelli, launched a fixed-rate 150 million euro ($194.14 million) bond on Friday 11 October. The bond is convertible into 5.85 per cent of Pirelli shares.
Atlas Copco has been included on a list of the world’s 100 most innovative companies, published by business magazine Forbes.
Buckinghamshire-based aftermarket supplier, Allparts Automotive Ltd will accelerate its branch network expansion following what it says is a significant investment from HgCapital. The company said its founder, Steve Fulford will continue to support the Allparts management team and retain his position as chairman of The Parts Alliance. As a founder of The Parts Alliance, Allparts stated that it would remain a committed and active member. Managing director, Mark Darvill, will continue to lead the Allparts board of directors and management team. Independent investment firm, HgCapital has assets under management of over £3.8 billion, and a strong interest in the automotive aftermarket. Allparts’ Parts Alliance colleague CES (UK) Ltd is also part of its investment portfolio, and the new investment will lead to greater collaboration between the companies, though both parties made clear that they intend to remain separate entities.
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