From Tire Review Staff & Wire Reports
Continental AG reported all-time record sales for 2004, posting revenues topping $17.19 billion, despite what the company referred to as an “overall sluggish economy in the global automotive industry.” The sales record showed a 9.2 percent increase over 2003 results.
While Continental gave no specific results for its long-ailing Continental Tire North America (CTNA) unit, Martien de Louw, CTNA president and Continental executive board member, said the unit “should be achieving a turnaround in the fourth quarter of 2005 as planned.”
Earlier this year, some industry watchers suggested CTNA would finish 2004 with a net loss of more than $100 million. For the years 2001 through 2003, CTNA lost an estimated $500 million.
For the 2004 fiscal year, Continental AG posted an EBIT of $1.5 billion, up 28.2 percent from 2003, and net income of $919.3 million, up 114.6 percent. The 2004 results included a $142 million one-time charge for the discontinuation of production at CTNA’s Mayfield, Ky., plant. The company’s debt decreased to $948.3 million.
Global passenger and light truck/SUV tire sales hit $5.6 billion, with Conti’s consumer tire group posting EBIT of $523.1 million. On the commercial tire side, global sales reached $2.05 billion, and EBIT hit $136.8 million.
Specifically regarding CTNA passenger and light truck/SUV tire sales, Conti said: “In the replacement business in the NAFTA region, sales volumes declined as intended, however, with an overall improvement in the product mix and margins.”
On the medium truck tire side, Conti said: “In North America, sales volumes in the original equipment business rose by 19.7 percent, while the replacement business was slightly below the prior year’s level as a result of capacity shortages.”
“We have once again succeeded in significantly surpassing prior-year figures,” said Continental AG chairman Manfred Wennemer. “For 2005 we are forecasting a further increase in our consolidated sales as well as our consolidated operating result. We do not feel that the increases in raw material prices will have any significant effect on the earnings. One of the mitigating effects will continue to be the trend in the U.S. dollar/euro exchange rate. Additionally, we will attempt to compensate the increases in raw material prices by adjusting the prices of our products.”
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