Milan, Italy – Despite double-digit declines in first half results and a net loss of over €100 million, Pirelli & C. SpA says it has 'contained' the effects of Covid-19 pandemic, learning from experience gained in China.
Earnings (adjusted EBIT) plunged 84% to €66.7 million during the first half, on 31.6% lower sales of €1.8 billion, the company announced 5 Aug. Total net results stood at negative €102 million, compared to a profit of €307 million made in the first half of 2019.
Pirelli said the tire sector was strongly impacted by Covid-19 globally in the first six months of the year, as economic conditions generally worsened while consumption and production decreased.
However, the tire maker said its "efficiencies and cost containment actions" limited the impact of the reduction in demand and the slowdown.
The Milan-based manufacturer said it used experience it gained in China – where production and commercial activities have returned to normal – to respond promptly to the pandemic and define an action plan in April.
Overall, the company saw a 28% drop in volumes in the first half, which included a 36% decline in volumes in the second quarter.
As for the 2020 outlook, the tire maker lowered its sales targets again, now expecting revenues to come in at €4.15 - €4.25 billion.
Earlier in April, Pirelli cut its annual revenue estimates to €4.3-4.4 billion, down from prior indication of around €5.4 billion.
Impacted by exchange rates, raw materials and increased costs, Pirelli said its adjusted EBIT margin is expected to come in at around 12%-13%, against previous indication of around 14%-15%.