OE decline impacts Pirelli H1 results

Milan, Italy – Pirelli & C SpA has seen its first half earnings (adjusted EBITDA before start-up costs) drop 2.3% year-on-year to €462.4 million, due mainly to a weakness in OE demand.

Revenue for the first six months of the year grew just under 1% at €2.56 billion, helped by increases in the high value segment, Pirelli announced 1 Aug.

Sales remained positive in all regions apart from Europe, Middle East & Africa, where Pirelli posted a 3.2% decline at €1.16 billion.

Pirelli attributed the decline to the fall in premium car production in Europe in the first half.

South America witnessed the largest revenue growth at 8.2% to €345 million.

Volumes for the period fell 5%, reflecting a 3.9% growth in high value segment and a 13.9% decline in standard tire segments.

A €100 million improvement of price/mix partially offset a €58.8 million increase in the price of raw materials, €4.7-million impact of currency volatility as well as the €57-million decline in volumes, Pirelli said.

Industrial efficiencies at €36.1 million also more than offset a €35 million costs’ inflation.

During the period, Pirelli also implemented a €30-million costs’ reduction plan to counter the decline in sales in the standard segment, particularly in Brazil.

This, the company said, helped offset the growing pressure on prices and cover the costs linked to the development of High Value.