Pirelli raised 2009 operating targets on Thursday on the back of strong tyre operations, after posting a third-quarter net profit at the top end of expectations.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Full-year sales are expected to top the target set in February for EUR4.3bn (US$6.4 billion), the company said in a statement. The margin for earnings before interest and tax is seen at 4.5%, even after higher-than-expected restructuring costs.
“In the light of the first nine months results it is foreseeable that the full year … will conclude with Pirelli reaching and for some indicators improving on targets set in the business plan in February,” it said.
This trend is “above all thanks to the positive trend in Pirelli Tyre”, it said.
Third-quarter net profit of EUR11.9m compared with three analysts’ forecasts ranging from a EUR1m loss to a profit of EUR12m, Reuters noted.
Pirelli further bettered its year-end net debt target to EUR700m after improving this to EUR800m in first-half results.
Looking ahead to 2010, Pirelli could buy a “quite new” tyre plant in Russia during the first half while it also plans a second plant in the country, chairman Marco Tronchetti Provera told a conference call.
“The second is a greenfield plant for truck tyres. We will not start building the plant until the second half of next year,” he said.
“We expect a recovery (in Russia) at the end of 2010 or in first half of 2011. We start production at end of 2010, first half of 2011. We are in a joint venture. Our investment won’t exceed EUR50m,” he said.
Russia tyre performance this year was “very negative” as the company focused on the recovery of customer receivables, tyre unit chief Francesco Gori said. On rubber prices, Gori said the fourth quarter would be similar to the rest of the year.
