HANOVER, Germany-Expanded sales volume, increased selling prices and cost-saving programs helped Continental A.G. offset rising raw material costs and unfavorable currency exchange effects to post gains in sales and pretax earnings for 1995's first half.
Pretax profits rose 53 percent to $41 million, while overall sales increased 4.6 percent to $3.6 billion for the six-month period.
Despite the improvements, Conti management is sticking by its earlier, conservative forecast for this year-a 3-percent rise in sales and a slight improvement in earnings, providing overdue price increases can be carried out in the coming months.
``Projecting forward the half-year result for the full year is not possible because of the `imponderables' in the marketplace,'' Conti's management board said in a letter to shareholders. Above all else, the upward spiral of raw material costs-the value of purchases for the six months is 25-percent higher than in 1994-is cause for caution, the letter explained.
The unfavorable dollar/deutschmark rate was reflected in Continental General Tire Inc.'s results-sales up 14.5 percent in dollar terms, but down 2.6 percent from a year earlier when expressed in deutschmarks.
The U.S. subsidiary posted sales of $764 million for the first half when reported in dollars.
Conti General reported 9- and 18-percent increases in unit sales of passenger car and truck tires, respectively; business with original equipment customers in both product categories was up. Conti General reported securing a contract to supply the Ford Taurus/Mercury Sable with its latest ``Ameri*G4S.''
Work on Conti General's new headquarters in Charlotte, N.C., is proceeding on schedule for personnel in the passenger car division to move in by year's end; truck tire personnel will follow during 1996.
In Europe, sales of passenger car and commercial vehicle tires jumped 5.8 and 14.3 percent, respectively, with OE deliveries to truck makers especially lively. The increase in car tire sales, on the other hand, resulted primarily from higher unit sales of performance car tires both to OE customers and in the aftermarket, Conti said.
Conti's non-tire products division, ContiTech Holding, increased sales 17 percent during the period, although a portion of this increase was due to internal restructuring.
Separately, Conti has completed a $7.3 million expansion of its Contidrom test track northeast of Hanover; the size of the test facility more than doubled to nearly 400 acres, with the key feature being a 2.4 mile high-speed handling course.
The expanded Contidrom has made at least one of Conti's other two test tracks in Europe superfluous. The firm's facility in Rocroi, France-inherited in the Uniroyal-Englebert takeover in 1979-is for sale, a spokesman said.