MILAN—Pirelli & C. S.p.A. has seen improvements in the market over the three months to end of September, but the tire maker's results remain below prior-year levels due to the impact of the COVID-19 pandemic.
"There was a marked improvement in the revenues' trend in the third quarter," Pirelli said in its nine-month financial statement Nov. 11, adding that its efficiencies plan and costs reductions mitigated the impact of COVID on results.
Third quarter revenues fell 7.5 percent to $1.42 billion, affected by negative currency impact. A recovery in demand for high value—premium and high rim-size tires—and price/mix partially offset the currency impact and a 12 percent decline in standard tire sales, Pirelli said.
Pirelli also noted that the fall in volumes was more contained during the quarter, with the high-value segment posting a 3.9 percent growth.
Volumes for higher rim-sized tires rose 4.3 percent in the OE segment, driven by the performance in Asia-Pacific, particularly China, and North America.
The Milan-based tire maker also said it regained market share in the replacement channel for 18-inch and bigger tires, with volumes up 6.1 percent in the third quarter, compared with a decline of 24 percent in the first quarter.
Third quarter adjusted EBIT fell 12 percent to $253 million, with adjusted EBIT margin at 16.7 percent, down from 17.7 percent in the third of 2019.
Total net income was up 6.6 percent during the third quarter at $99.2 million, Pirelli said.
Over the nine months to end of September, sales fell 23.4 percent to $3.67 billion, due to a fall in demand particularly in the second quarter and the volatility of exchange rates.
Over the period, high-value segment saw sales fall 19 percent, while demand in the standard segment plunged 32.4 percent.
Overall volumes declined 20.7 percent, reflecting a decrease of 14.9 percent in the high-value segment and 26.4 percent in the standard tires segment.
Adjusted EBIT for the nine months came in at $331.56 million, nearly 60 percent lower than $810 million reported in 2019. Here, Pirelli said, the contribution of efficiencies and cost containment actions limited the impact of the fall in demand and the coronavirus-induced slowdown.
Profitability over the nine-month period fell to 9.1 percent compared to 16.7 percent posted for the same period in 2019.
Net income in the first nine months was in the negative territory at minus-$21 million, down from $456 million reported last year.