MILAN—Demand for large-rim diameter tires helped to carry Pirelli & C. S.p.A. to a solid first quarter performance that included a bump in year-over-year earnings and sales.
The Milan-based tire maker reported an 8-percent year-on-year increase in first quarter earnings helped by a stronger price/mix. For the three months to the end of March, Pirelli posted earnings of around $391 million 12-percent higher sales of about $1.8 billion.
The Italian group linked the higher revenues to a 15-percent improvement in price/mix, which more than offset a 3-percent decline in volumes due to weaker demand. Supported by higher sales and efficiencies, the earnings gains offset higher raw materials costs, inflation and exchange rates, added a Pirelli said in a May 11 statement.
During the quarter, Pirelli noted a 5-percent increase in sales of large rim-sized tires with "solid replacement demand" and a strong OE focus on 19-inch and bigger tires.
Pirelli also lowered its exposure to standard tire markets by four percentage points to 36 percent of total production.
In terms of capacity utilization, the tire maker said it registered a 90-percent run-rate "discounting China and Russia lower production levels." Utilization rates for high-value, large tires reached 96 percent, according to Pirelli.
In Russia, Pirelli said it operates "in compliance with international sanctions" and has suspended investments. For the first quarter of 2023, Russia accounted for 3.5 percent of turnover and about 8 percent of group production.
For the full-year outlook, Pirelli confirmed its previous forecast, with sales set to remain fairly flat, coming in somewhere between $7 billion and $7.5 billion. Earnings (EBIT) margin is projected to come in slightly lower than last year's 14.8 percent, in an estimated range of between 14-14.5 percent.
While the company remains optimistic it can hit its expected full-year targets, it did not that the next nine months will remain "volatile" as recessions loom and inflationary pressures are expected to continue for the foreseeable future.
