Pirelli delivers Q1 gains amid 'control' standoff with Sinochem

Milan, Italy – Pirelli reported solid gains for the first quarter of 2025, as it grapples with an ongoing 'control' standoff involving key shareholder Sinochem.

Adjusted earnings (adjusted EBIT) for the first three months grew 6.5% year-on-year to €280 million, on a 3.7% rise in sales to €1.75 billion, Pirelli reported 14 May.

Organic revenue grew 4.7% compared to the year before, but was impacted by negative effects from forex and hyperinflation in Argentina and Turkey.

Total volumes in the first quarter were up 0.8% year-on-year, mainly reflecting gains in the large-tire (18 inch and up) segment.

The price/mix registered an increase of 3.9% year-on-year, mainly due to a stronger product mix and positive regional mix, while the channel mix remained substantially unchanged.

Adjusted earnings improved with a positive contribution from price/mix (€42.3 million) and efficiencies (€25 million), which more than offset the increased cost of raw materials (€22.2 million) and inflation of input costs (€24.5 million).

The group also noted a slightly positive forex impact of €4.4 million, mainly due to the revaluation of the US dollar and the depreciation of the Mexican peso, where Pirelli has a production facility.

Alongside its first-quarter results, Pirelli reported that it had "not reached a positive outcome” in its negotiations with majority shareholder Sinochem to resolve issues affecting its growth strategy in the US.

Among the issues facing Pirelli in the region are those around the Washington administration's intensifying its scrutiny of and restrictions on China-linked software and hardware being used on US roads.

Pirelli said the proposals it has so far put forward have been rejected by Sinochem.

At the same time, directors designated by Sinochem presented a proposal to the Italian government’s ‘Golden Power office’, said Pirelli, adding that details of the proposals had not been shared with the company. 

Late last month, Pirelli announced that it was ending Sinochem’s ‘control’ of the company in order to safeguard its US market position. (ERJ report)

In its first-quarter results, Pirelli said its ‘cyber tire’ technology was well received by clients in Italy, the UK, the US and China, showing that its technological developments are “moving in the right direction.”

“On the back of such strong results, the management remains confident that with the support of its historic shareholders and the market, Pirelli’s interests will be fully protected with respect to all stakeholders,” it stated.

Pirelli, therefore, “remains open to exploring solutions that will allow it to achieve full compliance with the rules of the US market and will continue to do everything in its power to protect development in a strategic market such as the US.”