HANOVER, Germany (March 31)—Continental A.G. reported record sales and earnings for last year, and management expects more of the same in 2005 as Conti integrates Phoenix A.G.´s activities into its ContiTech unit, raises investments and reduces debt.
The firm also expects its North American passenger and light truck tire business to hit break-even by the fourth quarter, as the impact of higher prices, increased sales of lower-cost imported tires and restructuring takes effect.
For the year, Conti reported a 28.2-percent jump in operating earnings, to $1.36 billion, on 9.2-percent better sales of $15.6 billion, raising the earnings/sales ratio to 8.7 percent. The addition of Phoenix in November accounted to $200 million in new sales. Net income more than doubled to $390 million, or 2.5 percent of sales.
In North America, the firm's passenger and light truck tire business cut its losses from 2003 by an undisclosed amount. Conti´s replacement market business in region declined "as intended," according to Martien de Louw, executive board member responsible for the division.
Overall the business marked improvements in product mix and margins. Total passenger/light truck tire shipments increased about 2.4 percent to 102.2 million units as original equipment business improved.
Regarding commercial tires, Conti said its OE business was up nearly 20 percent over 2003, but replacement sales were down slightly "as a result of capacity shortages." Conti said it intends to import 100,000 medium truck tires from Malaysia this year to supplement its U.S. capacity.