Pirelli reports 6 percent growth in tyre business for H1

Milan -- Pirelli Tyres' results for the first six months ending 30 June 2007 show that the company's revenues and operating income were up by 6.6 percent and 6 percent respectively.

Revenues for the six-month period rose to €2151.4 million compared with €2018.4 million in 2006. According to Pirelli, the increase was due to growth in volumes and the focus on product mix as well as focus on greater added value segments, despite a negative exchange rate effect.

Operating income (EBIT) for the tyre operations amounted to €206.3 million - up from €194.6 year-on-year, with a return on sales of 9.9 percent - in line with last year. Pirelli said that the increase in revenues and efficiencies compensated the rise in the cost of raw materials that had a negative effect on results, net of exchange rates, equal to €29.5 million.

EBITDA for the tyre segment was €301.7 million - or 14 percent of sales. This was an increase of 3.1 percent compared with figures in 2006 which showed EBIT to be €293.6 million.

Net income in the half was €117.4 million (after financial charges of €28.3 million and tax charges of €61 million), almost unchanged from the €118.3 million reported a year ago.

Employment figures as of 30 June 2007 showed that Pirelli Tyre has employed a further 1707 (719 of which are on temporary contracts). This is thanks to the growth of businesses worldwide, especially the company's new industrial facilities in Romania and China.

In truck tyres, Pirelli grew in China and consolidated its market share in (the Mediterranean and South America. In steel cord the company saw volumes rise in a stable market (excluding China, where demand was rising).

In the Consumer business, the first half showed overall growth both in terms of sales and of profitability compared with the same period in 2006, thanks to greater volumes and to a better price/mix component. In particular, revenues amounted to €1492 million - and increase of 6.4 percent and operating income from ordinary business amounted to €149.1 million - up 8.5 percent.

In the Car/Light Truck segment, Pirelli grew at double-digit rates in North America, despite stable demand in replacement tyres and falling demand in original equipment, and benefited from an increase in demand in South America, in particular in original equipment.

In the Industrial business, the first half closed with revenues of €659 million - up 7 percent compared with the same period of 2006, despite the negative exchange rate trend.

Operating income of ordinary business was €57.2 million - in line with the first half of 2006 net of the increase in cost factors, of natural rubber and of energy.