Tyres and parts maker Continental AG said on Wednesday it was considering making further acquisitions in the medium term, Reuters reported.
“If there was an opportunity to buy the right business at the right price, we now have the financial ability to do that,” Continental chief executive Manfred Wennemer told Reuters, citing the company’s progress in cutting its debt.
The news agency noted that Continental has managed to ride out the malaise in the global automotive industry by shutting tyre factories and focusing on expanding its electronic components business – this strategy has paid off at a time when German carmakers are launching more new models than ever, many with the electronic braking, steering and suspension systems that Continental produces.
Reuters said the company posted a 15% increase in first-half operating profit last month and said it was expecting to generate full year operating profit of more than €700 million ($US778 million). Net debt fell by €625 million in the first six months of the year, cutting Continental’s gearing, or debt-to-equity ratio, to 113% from 155, and putting it on track to hit its year-end target of having less debt than shareholder equity, the report added.
Wennemer told Reuters Continental was not about to make another acquisition but would keep its eyes open, particularly in the tyre business.