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2020-05-13

tyre-maker Pirelli said operating profit fell by 36 percent due to virus

Image:-Pirelli tyre

On Wednesday, the Italian tyre-maker Pirelli said that his operating profit fell by 36 percent in the first quarter of the year, as the COVID-19 emergency and consequent locking measures had hit the global industry hard.

Manufacturing was severely disrupted as operations in different countries were suspended in order to protect workers ' health and as a result of the marked decrease in demand, the company said in a statement.

For Formula One teams and high performance car manufacturers like BMW and Audi, the adjusted earnings before interest and taxes (EBIT) in the first three months of the year amounted to 141.1 million euros (153 million dollars).

But that was above a market consensus of EUR 128 million provided by the company.

The adjusted EBIT margin was down from 16.7% the year earlier on to 13.4%, while actions taken by the Group to improve efficiency and lower costs have limited the impact of the coronavirus crisis.

On 3 April Pirelli confirmed its revised full-year 2020 target when it slashed the planned dividend on 2019 results, and its adjusted EBIT margin would be between 14% and 15% this year, compared to a preliminary guidance of approximately 17%.

The company claimed that net cash flows in the quarter amounted to EUR 753.5 m, broadly in line with a cash burn of EUR 712.9 m over the same period last year.

As of 31 March, liquidity totaled 2.1 billion euros, which allows Pirelli to cover its financial debts for approximately three years.

This year's estimated positive impact on the costs of the new Pirelli business plan published in February is now estimated at approximately EUR 160 million , down from an initial projected EUR 180 million.

Pirelli said that in the fourth quarter of the year, he would revise his business plan by 2022.

($1 = 0.9231 euros)

Article Edited by | John Heine |

Jhon is an incredibly talented freelance writer. He has been working of about 18 months as a reporter for some internet based print-based newspapers. He brings together significant news reports from the Technology and entertainment areas. we hope you're doing well if you see any inappropriate phrases please let us know on our contact page at the bottom. thank you!    .

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