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Pirelli posts 1H revenue of $4 billion

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Pirelli & Cie SpA recorded net income of 158.8 million euros on sales of 2.8 billion euros of the first half ended June 30, 2011. That compares to income of 77 million euros on sales of more than 2.3 billion euros for the same period last year.

(There was a 252.6 million net loss from discontinued operations in the first half of 2010. If that is taken into account, Pirelli lost 175.6 million euros in 1H 2010.)

Based on the exchange rate on June 30, 2011, Pirelli posted income of $228.5 million on sales of $4 billion for the first half of its fiscal 2011. The company's 1H income-to-sales ratio was 5.7%.

"In a market displaying a positive overall demand trend in the tire sector, which... accounts for 99% of group sales, the results of the first half demonstrate continuous growth and improvement of all economic indicators," says the company. "These results were obtained as a consequence of the positive effects of continuing efficiency actions and above all the effectiveness of price/mix actions with sales increasingly concentrated in the 'premium' segment and with the price component able to offset increases in raw material costs."

Revenues in the Pirelli Tyre divison for the first half increased 18.7% to more than 2.7 billion euros (the consumer tire segment, which includes motorcycle tires, represents 70% of that). For the second quarter, sales were up 13.3%, to more than 1.3 billion euros. Net income for the half totaled 162.8 million euros, and for the quarter 74.3 million euros.

Following what it describes as positive first-half results, together with "ongoing efficiency actions and the effectiveness of actions to improve the price/mix component," Pirelli & Cie has raised its 2011 profitability target compared with the estimate made in May when first-quarter 2011 results were released. In particular, the optimism is due "to the positive results deriving from the focus on 'premium'
products and lower raw material cost increases than forecast in May."

Excluding unforeseeable events, Pirelli & Cie is targeting consolidated revenue “above 5.85 billion euros.”

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