HANOVER, Germany—Continental A.G.'s Rubber Technologies Group, which includes its tire and ContiTech businesses, has seen its first quarter results drop significantly as a result of the declining demand brought on by the COVID-19 pandemic.
The segment reported a 17.5 percent drop in earnings (EBITDA) to $704 million, on 9 percent lower sales at $4.2 billion.
Sales in the tire division fell 12.2 percent to just under $2.7 billion as volume fell 11.7 percent across all product areas. Adjusted EBIT fell 36.6 percent to $285 million due to lower volumes, underutilisation and ramp-down costs.
Industrial products unit ContiTech reported 8.1 percent lower sales at $1.64 billion, as OE business declined. Adjusted EBIT remained flat $126.5 million, as volume declines were compensated by margin-enhancement measures.
Continental said its China replacement tire volumes had fully recovered, while European activities are starting to pick up after coronavirus shutdown measures
"Almost all (tire) plants restarted and are incrementally ramping up," Continental reported in its financial presentation. In the Americas, it added, production is resuming in line with local regulations.