Long awaited Cooper 2013 3Q report reveals Apollo, Chengshan damage
Cooper Tire has released its 2013 third quarter financial report, carrying with it the scars of the failed Apollo Tyre deal and the linked issues with the Cooper Chengshan (Shandong) Tire Company (CCT) joint venture. Cooper could not report before now as a result of unrest and lack of cooperation at CCT’s Rongcheng facility in reaction to Apollo’s attempted acquisition. The company said that it will produce Q4 and full 2013 financial reports later in March.
Cooper made a net loss of $168,000 in the quarter, compared to $74 million net profit in the same period in 2012. Operating profit was $28 million; $102 million lower than in Q3 2012. Net sales were $832 million, $263 million less than in 2012. In the first nine months of 2013 operating profit was $194 million compared with $273 million for the same period in 2012.
“With the merger agreement terminated and operations returning to normal at CCT, we are resuming financial reporting and moving our business forward,” said Cooper chairman, chief executive officer and president Roy Armes, who emphasised that adverse results had been expected for this and in further “near term” reports “to a lesser degree”.
He continued that the company’s “business model remains resilient and we will report positive operating profit and net income for the fourth quarter and second half of 2013.” Concluding he said that Cooper ended 2014 with “a strong balance sheet” as a result of continued investment.
Cooper says the 2013 stoppages, starting on 13 July 2013 and continuing with workers not manufacturing Cooper brand products when they returned to work on 17 August, reduced operating profit during the third quarter by $29 million, including $22 million from lower volume and $7 million from manufacturing inefficiencies. Cooper also incurred $5 million of expenses associated with the merger during the third quarter.
“We remain confident that Cooper will successfully move past the negative near-term impacts we have described today. Our business model has demonstrated its resilience and we continue to execute the solid strategic plan that positions Cooper well for future growth,” Armes said. “Cooper has a strong global network of manufacturing facilities and distribution sites, a skilled workforce, outstanding product development and technical capabilities, as well as a loyal customer base. These assets and others will continue to be the basis for our success over the long term.”