Amtel-Vredestein, Europe’s fourth-largest tyre producer, slumped to a net loss in the first half of 2006 due to high prices for raw materials.
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According to Reuters, the Russian-Dutch company reported a net loss of $US15m compared with net profit of $1m a year ago.
Net sales rose 22% to $350m in the first half, and were up 15% in the second quarter over the first quarter of 2006.
“The company projects sales of $800m in 2006 and higher sales in 2007 now that its capacity shortfall is expected to be resolved by an acquisition of the Moscow tyre plant and expansion of its Voronezh facility,” it said in a statement cited by the news agency.
But it added that margins would continue to be squeezed by rising raw material costs while higher expenses from expansion and acquisitions would put further pressure on earnings.
It said gross profit rose 43% to $80m in the first half of 2006, while gross profit margin grew to 22.9% from 19.6%.
Sales of branded passenger car tyres were up 81% to 4.9m units compared with 2.7m units in the first half of 2005, Reuters added.
