Pirelli posts first-half revenues of $2.7 billion
Pirelli & C. SpA recorded consolidated revenues of 2.28 billion euros for the first half ended June 30, 2005. That compares to revenues of 2 billion euros for the first half of 2004, an increase of 13%.
Based on the exchange rate at the time of the announcement, Pirelli's revenues for the first half totaled $2.76 billion.
Consolidated operating profit (EBIT) for the first half amounted to approximately 202 million euros ($245 million), an increase of 33% compared with the same period last year. Return on sales at the consolidated level was 8.8%, an increase from 7.5% in 2004.
"Over the first six months of 2005, the Pirelli & C. SpA Group saw a significant improvement in all economic indicators, in particular a further increase in profitability, validating Pirelli's strategy of focusing on a selected number of high margins businesses and aimed at the top-of-range market segment," said the company.
The performance of the Group's Industrial Activities in the first half of the year was characterized "by the excellent performance of the Tyres Sector," which recorded a further increase in profitability compared with the preceding quarters. Pirelli Broadband Solutions also grew, with sales equalling those achieved in the whole of 2004.
Sales in the Tyres Sector in the first half amounted to approximately 1.8 billion euros, an increase of 8.3% compared with 1.66 billion euros in the first half of 2004.
The operating profit was approximately 187 million euros, an increase of 21%. "The growth in volumes, particularly in North America, and the continual drive towards a high margin product mix contributed to the positive performance, despite the price increase in raw materials," said Pirelli.
"The results obtained in the first half of the year allow management to confirm Group expectations of a significant improvement in results for full year 2005 in all sectors of activity at both the operating and net levels, excluding unforeseeable external factors of an extraordinary nature."
Pirelli's financial statements for the first six months will be examined by its board of directors on Sept. 12, 2005.
The Group's net financial position on June 30, 2005, is negative for approximately 2.34 billion euros, of which approximately 715 million euros are connected with the Cables and Systems activities. Including the positive effect of the 1.2 billion euros received for the Cables and Systems division, net financial position decreased to approximately 1.14 billion euros.
(The agreement between Pirelli & C. SpA and Goldman Sachs Capital Partners for the sale of Pirelli's Energy and Telecom Cables and Systems business to Goldman Sachs Capital Partners was completed July 28.)