TRELLEBORG, Sweden—Trelleborg A.B. has posted a 26 percent rise in net sales for the second quarter of 2017 to $997 million, thanks mainly to the acquisition Mitas parent group, CGS last May.
Structural changes, including the CGS takeover, made a positive contribution of 20 percent to net sales, Trelleborg said in an interim report issued July 20.
Earnings (EBIT) rose 21 percent $131 million, while EBIT margin dropped to 13.2 percent in the first half compared to 13.7 percent in the same period last year.
During the first half, demand improved in most market segments in all geographic regions, excluding project businesses, comprising mainly offshore oil and gas-related operations, explained Trelleborg President and CEO Peter Nilsson.
General industry developed well in all regions, Nilsson said, noting there was a "highly favorable organic trend" in Asia.
In the tire segment, demand for Trelleborg tires grew for both the agricultural sector and industrial and construction machinery.
Nilsson also pointed to a sharp increase in raw materials costs, but added that prices had "fallen to approximately the same levels as during last summer."
This however had little impact on Trelleborg's earnings due to its "premium position," the CEO added.
"We are continuing to work with pricing to offset the effect of this, and the outcome moving forward is largely dependent on how the players in the various stages of the market react," Nilsson said.
The oil and gas market remained weak for the Swedish group, mainly affecting the Trelleborg Offshore and Construction business area.
The unit reported "a minor loss" for the second quarter, according to Nilsson.
"The market situation is similar to the first quarter, with intense price pressure for the small number of outstanding project transactions," he added.
Trelleborg's recent focus on digitization will continue to be among the company's main initiatives, Nilsson said, noting he want to see the firm remain "at the forefront of industry" with the ability to respond to changes brought by technology.
"We want to make it as easy as possible for customers to do business with Trelleborg. If we… offer the highest product quality and smartest comprehensive solutions, then we as a group have an exciting future ahead of us," he added.
Nilsson said Trelleborg would continue to "carefully monitor economic developments and maintain a high level of preparedness to manage fluctuating market conditions."