Tyre and wheel business news from the segment’s most important companies.
Nokian Tyres president and CEO Kim Gran says the Finnish tyre maker got off to a “flying start” in 2012 and made clear improvements in both production and sales. In a stock exchange release dated 9 May, Gran shared that “sales improved in all our markets with growth in Russia again outshining other areas. Productivity gains, a tight ship and an improved ASP guaranteed a good financial result.”
Cooper Tire & Rubber has announced a quarterly dividend of 10.5 cents per share on its common stock, payable 29 June 2012, to stockholders of record at the close of business on 1 June 2012. This is the 161st consecutive quarterly dividend paid by the tyre maker.
In addition to soon to be announced plans for a new factory in Central/Eastern Europe, Apollo Tyres has voiced interest in establishing a plant somewhere in Asia. On 11 May, the Hindu Business Line quoted Apollo vice-chairman and managing director Neeraj Kanwar as saying “we would like to set up a production base in Asean.”
American transmission company Competition Clutch has opened a dedicated UK sales office and logistics centre. The company has partnered with Universal Automotive in Kidderminster, from whose 40,000 sq ft facility Competition Clutch products will be available to UK end-users and retailers. The manufacturer said the move will build on the sales success of its diverse race-quality clutch range in its native USA and in UK motorsport.
Deutsche Bank analysts have raised their target price for Cooper Tire & Rubber shares to US$19.00. In an investors’ note published 3 May, the analysts stated that Cooper Tire “reported stronger than expected Q1 earnings of $0.34 versus our $0.27 estimate. Margins were significantly higher than we expected (operating margin was 4.8 per cent versus our 3.9 per cent estimate). All of the upside versus our estimates was derived from lower than expected raw material inflation. Nonetheless, the results were impressive considering that they were achieved despite $0.32 of strike related costs. This reinforces our view that tyre companies are becoming more profitable at any volume. We maintain our Hold based on uncertainty surrounding structural industry changes.”
A week ago, Continental gave word that its performance in the first quarter of this year was “very good”. The company has now released its full report for the quarter, providing additional details on the three-month period to 31 March.
Despite higher manufacturing costs in the first quarter of 2012, including costs related to the lockout at its Findlay plant, Cooper Tire & Rubber has announced improved results. The company reports net sales of US$984 million in the first three months of the year, an increase of $82 million, or nine per cent, compared with the first quarter of 2011. Operating profit was $48 million for the quarter, an increase of $16 million from the prior year same quarter. Net income attributable to Cooper Tire & Rubber for the quarter ended 31 March 2012 was $22 million, or $0.34 per share on a diluted basis, compared with $16 million, or 25 cents, for the first quarter of 2011.
Hankook Tyre UK has announced that its partnership with Northampton Saints Rugby Club will be extended for a further four years, having begun in 2009. The new agreement means Hankook will remain the elite sponsor until 2016, with the company’s logo positioned on the team’s shirts. The tyre manufacturer’s headquarters are in Daventry, Northamptonshire, near the Saints’ home ground, Franklin’s Gardens. Tony Lee, managing director of Hankook Tyre UK stated that “The partnership between Hankook and the Saints has been a great success to date.”
Titan International is very pleased with its first quarter 2012 results. The company recorded sales of US$463.1 million for the three-month period, compared to first quarter 2011 sales of $280.8 million; these higher sales levels are attributed to the April 2011 acquisition of Goodyear’s Latin American agricultural tyre business, which recorded sales of $90.3 million for the first quarter 2012 and continued to benefit from strong demand in the agriculture and earthmoving/construction segment, combined with price/mix improvements.
Despite higher sales, PT Gajah Tunggal Tbk reports its net profit for the first quarter of 2012 was down 23.5 per cent year-on-year. During the three months to 31 March 2012 the Indonesian tyre maker made sales of Rp 3,146 billion (£210.0 million), up 8.63 per cent on a year earlier. Gross profit amounted to Rp 558 billion (£37.2 million), while net profit came to Rp 254 billion (£17.0 million), down from Rp 332 billion a year earlier. EBITDA increased from Rp 380 billion to 497 billion (£33.2 million).
On 25 April, Hankook Tire Co., Ltd. reported to the Korea Stock Exchange that its Board of Directors has approved the divestment of its tyre business, effective 1 September 2012. This measure is being taken to improve shareholders' and corporation value. The company will remain listed and the division being divested, Hankook Tire Worldwide Co., Ltd., will form a public company.
Michelin has given word of its 24 April repurchase of more than ten per cent of the issued number of its lowest ranking subordinated notes (titres subordonnés remboursables de dernier rang), due 3 December 2033, for an aggregate nominal amount of 500,000,000 euros admitted to trading on the regulated market of NYSE Euronext Paris under ISIN FR0010034298. Following the repurchase, the outstanding nominal amount is 85,197,000 euros.
Sales at Goodyear Tire & Rubber Company during first quarter of 2012 were a record for the period, the US tyre maker claims. Announcing the company’s results for the opening three months of the year, Goodyear chairman and CEO Richard J. Kramer commented “I'm pleased with our results as our businesses posted solid operating income.”Our teams delivered these results in the face of a difficult volume environment and high raw material costs, with a strong focus on price/mix.
At its Annual Shareholders’ Meeting on 27 April, the Continental Corporation reported a “very good start” to this year. During the first quarter of 2012, the company experienced a double-digit year-on-year growth in sales to 8.3 billion euros, with sales in both its tyre and automotive markets stronger. Reported EBIT, at 766 million euros, exceeded the previous year’s figure considerably, and with a margin of 10.6 per cent, adjusted EBIT before acquisition-related amortisation and special effects amounted to roughly 875 million euros, up from last year’s figure of 734 million euros. Continental will publish its first quarter report in full on 3 May.
Moody’s Investor Service has upgraded Compagnie Générale des Etablissements Michelin's long-term credit rating to Baa1 from Baa2, with a stable outlook. Michelin’s P-2 short-term rating remains unchanged.
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