Continental posts loss but remains optimistic
Continental AG is optimistic the company is headed in the right direction following a disappointing fiscal 2001.
There are a number of reasons for the company's positive attitude:
* Continental says consolidated sales and income for the three first months of the year are above last year's level -- and ahead of projections.
* The company has cut back overcapacities in tire production and improved plant efficiencies.
* Restructuring measures introduced last year are running as planned. "We made major investments in wide-ranging restructuring last year," says Manfred Wennemer, chairman of the executive board.
Continental says it expects "a modest increase in sales this year and markedly improved income."
The company posted a net loss of Euro 257.6 million and earnings per share of minus Euro 2.05 in 2001.
Consolidated sales rose 11.1% to Euro 11.2 billion in 2001 vs. 2000, although that figure drops to 5.6% if sales from Conti Temic, which were included last year for the first time, are factored out.
Operative income before scheduled goodwill amortization and non-recurring charges amounted to Euro 500 million, or 15.6% below the comparable figure for the previous year.
When the non-recurring charges are taken into account, operative income dropped to Euro 32.8 million, or 94% below 2000's comparative figure. Non-recurring charges, particularly in the tire divisions, amounted to Euro 468 million vs. Euro 60 million the previous year.
Sales of OE and replacement tires worldwide declined by about 4%.
The Passenger Tire Division realized sales of Euro 2.846 billion, an increase of 7.8% over 2000. The Commercial Vehicle Tire Division recorded a 9.3% decrease in sales in 2001.
Continental AG's Continental Tire North America Inc. (CTNA) subsidiary experienced a 1.1% decline in sales to Euro 1.743 billion. Measured in U.S. dollars, sales were off 4.4%.
The company says the decline in North America "was due to the marked downturn in North American vehicle production."
After closing fiscal 2000 with an operating profit of Euro 20.9 million, CTNA slid into the red in 2001 with a loss of Euro 314.8 million. "Income was hurt mainly by non-recurring costs in Mexico for the shut-down of the plant in Guadalajara, and a write-down on fixed assets and in the total amount of Euro 203 million," said the company.