For the 2019 financial year, Pireli Tyre has projected that its revenue would grow to Euros 5.3 billion representing 2.5 per cent higher than a previous guidance of between 1.5 per cent and 2.5 percent.
The tyre manufacturer said it would present its 2020 industrial plan, earlier scheduled for December 11 this year in the first quarter of next year, even as it expects a full-year cash flow of between Euros 330 million and Euros 350 million, against a previous forecast.
Marco Tronchetti Porvera, Pirelli chief executive officer explained that, the move followed an “effective” deterioration of market conditions. “In this context, to protect our profitability we have to act deeper to reduce the cost of our products,” he said.
Meanwhile, the company has cut its guidance on operating profit margin and cash flow, and said it would delay the presentation of its new business plan as it needed to work out stronger measures in a worsening market scenario.
In nine-month results, Pirelli said adjusted earnings before interest and taxes (EBIT) slightly fell to Euros 685 million, in line with a market consensus provided by the company. That equates to a margin of 17 percent.
Adding to a string of auto parts suppliers hit by prolonged industry weakness, Pirelli said it forecast a full-year margin on its adjusted earnings before interest and taxes (EBIT) between 17 percent and 17.5 percent versus an already lowered previous target of 18-19 percent.
Pirelli, which makes tyres for F1 racing teams and premium automakers such as BMW and Audi, said in a statement it cut its guidance after facing greater fixed costs as it lowered production to reduce inventories.
MIKE OCHONMA
