After seeing a full-year profit rise, Italian tyre company Pirelli is expecting adjusted operating profit of at least 8 % this year, maintaining stable growth through its focus on high-margin premium tyres.
The company reported a 9.7 % rise in 2017 adjusted operating profit to 926.6 million euros (US$1.14 billion), which it said was in line with its forecast of about 930 million euros.
Shares initially fell 2 % but quickly recovered to show little change on the day.
Pirelli has focused on high-value tyres for Formula One racing teams and premium automakers since its less profitable industrial unit was hived off as part of a 2015 takeover by China National Chemical Corp (ChemChina).
Premium tyres accounted for 57.5 % of 2017 revenue of 5.35 billion euros, the company said, adding that it expects to lift the contribution to 60 % this year.
Selling more high-margin products and improving efficiency more than balanced out the effects of increases in raw material costs, cost inflation and amortizations, the company said.
One of Italy’s best-known brands, Pirelli returned to the stock market in October, two years after the ChemChina buyout.
(RJA)
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