Aeolus reports declines, lays out Pirelli restructuring framework

Jiaozuo, China – Aeolus reported a 22-percent drop in revenue to €856 million in 2015. Annual net profit fell by 25 percent to €33 million.

Sales volume decreased at a noticeably slower rate of 4 percent to 8.7 million units, and the company plans to up its production to 9.5 million units in 2016.

Revenue from foreign markets declined by 19 percent last year, compared with a 21 percent rise in 2014, due to reasons such as pulling its PCR business out of the US since anti-dumping tariffs – China’s top ten tire makers showed a slightly sharper average drop in 2015 at 21 percent.

Overseas sales still accounted for 53 percent of Aeolus’ total revenue and roughly maintained a 24 percent gross margin, 8 percent higher than that for domestic sales, which continued its downturn at a 26 percent rate last year to €390 million.

The US remains the company’s largest single-country export market where it sold 500,000 units TBR tires in 2015, representing a 2.9 percent share in the segment, up from 2.5 percent a year before, the company told ERJ.

Expanding its domestic original equipment business for engineering tires, the company partnered up with Volvo Construction Equipment (China) in May 2015. The first quarter saw the company’s net profit up by 17 percent year on year to €8.6 million, although revenue fell by 19 percent to €172 million.

Aeolus signed a framework agreement in March with the company’s largest shareholder ChemChina affiliate China National Tire and Rubber, which currently controls Pirelli, on the merger with the Italian tire-maker.

The agreement covers Aeolus’ full acquisition of Pirelli’s industrial tire business holding unit Pirelli Industrial Srl as well as three ChemChina tire subsidiaries, and an exchange of Aeolus’ PCR business unit with Pirelli’s TBR unit. “The US [TBR] anti-dumping case is not likely to impact the framework agreement with Pirelli,” the company told ERJ.

In April, Aeolus appointed its new chairman Bai Xinping, who also chairs the company’s largest shareholder ChemChina affiliate China National Tire and Rubber, which currently controls Pirelli, following former chairman Wang Feng’s resignation a month earlier.