Continental Sales And Earnings Rise In 1Q
Continental has turned in a good performance in the first quarter, despite a sluggish automotive sector market. Sales rose 3.2 per cent over 1Q 2002 to 2.
82 billion Euros (1Q 2002: 2.73 bn). If these are adjusted for currency fluctuations, the increase was 9.
7 per cent. Net profit was up 28 per cent to 87 million Euros, giving a margin of 6.5 per cent.
This was higher than analysts’ forecasts of 76 million Euros.Passenger tyre sales rose 3.3 per cent, to 900 million Euros (871 m), although making currency adjustments would increase this to 9.
1 per cent. There was an increase in OE sales in North America, although the replacement market was static. In Europe, Continental made gains in both sectors.
Sales of commercial vehicle tyres declined 7.5 per cent, to 283 million Euros (306 m), due largely to a change in consolidation of the South African company Continental Tyre South Africa, which used to be consolidated entirely in commercial vehicle tyres but is now divided up between commercial and passenger tyres. Discounting this, and allowing for currency fluctuations, sales would have risen 3.
4 per cent. As for passenger tyres, gains were made in the North American OE sector and replacement sales were down over 1Q last year. In Europe, volumes rose in both the OE and replacement sectors.
Away from tyres, turnover at Continental Automotive Systems was up 7.4 per cent to 1.195 billion Euros (1.
113 bn), benefiting especially from gains in the supply of hydraulic brake systems and electronic components. Sales at ContiTech were up too, by 2.4 per cent to 459 million Euros (449 m), giving the division its best-ever first quarter net profit margin of 8.
9 per cent.Looking ahead, Continental warns of a contraction in automotive vehicle production in both North America and Europe, although 40 per cent of the group’s business is realised outside the automotive sector. Bearing this in mind, Continental expects full-year earnings to exceed those of 2002 and for indebtedness to continue to fall.