PRAGUE (July 19, 2012)—Agricultural and industrial tire maker Mitas A.S. posted a 32.6-percent increase in sales for fiscal 2011, but operating income fell 25.3 percent, largely because of increases in raw material costs.
The tire maker's results reflected that of parent CGS Holding A.S, which reported a 28.5-percent increase in sales to $786.5 million and a 23-percent decline in operating income to $25.3 million.
The tire unit, which accounts for nearly 77 percent of CGS' revenue, recorded sales of $603.5 million and operating profits of $25.3 million, or 4.2 percent of sales, according to the firm's 2011 annual report.
The company said it mitigated the effect of rising costs to a large degree by higher selling prices and by optimizing other expenses.
The firm said demand was higher in both its major segments, agricultural and industrial tires.
Positive cash flow throughout the year enabled a smooth beginning to the firm's new farm tire plant in Iowa for Mitas, the company said.
As for fiscal 2012, CGS said it anticipates growth in the U.S. economy, while the European Union economy shows signs of stabilization. This should result in increased production of construction and agricultural machinery, the firm said, and a rising aftermarket.
Europe accounts for 84.5 percent of sales, CGS said, while sales in the Americas increased three percentage points to 10.8 percent, or approximately $65 million.