Titan evaluating Brazil wheel facility, expansion in Turkey
Titan International is considering an expansion of its wheel business in the coming half year. In the company’s second quarter 2015 results announcement, CEO and chairman Maurice Taylor reports that Titan International is “exploring plans to expand our wheel plant in Turkey” and to “establish a new wheel presence in Brazil to accompany our existing tyre business.” Taylor did not furnish any additional details about the two potential projects.
Tyre-related initiatives planned for the next six months include the introduction of new underground mining tyres (and wheels), and super single tyres offered in conjunction with a three-piece wheel designed to offer easier dismounting. Construction work on the Titan Tire Reclamation project is taking place following the delivery of equipment to the oil sands, and Titan is working towards a start of operation before 1 April 2016.
As for the company’s second quarter financial performance, despite a marked year-on-year drop in net sales during the three months from 1 April to 30 June, Titan International managed to return to the black. Net sales for the quarter were US$376.1 million, 28.2 per cent lower than the $523.7 million earned in the second quarter of 2014. Overall sales were influenced by an 11 per cent reduction in volume and negative seven per cent price/mix change due to competitive pressures an ongoing cyclical downturn in the agricultural market. Unfavourable currency translation also decreased sales by ten per cent.
Gross profit for the second quarter of 2015 was $51.1 million, or 13.6 per cent of net sales, compared to $20.8 million, or 4.0 per cent of net sales for the second quarter of 2014. Income from operations for the second quarter of 2015 was $7.5 million, or 2.0 per cent of net sales, compared to a loss of $29.5 million in 2014. Adjusted net income for the second quarter was $1.0 million, compared to $1.7 million in the second quarter of 2014.
“This past quarter, like the first, proves that what the management team has done in 2014 and thus far in 2015 is paying off,” Taylor commented. “Titan’s agriculture, mining, construction and consumer businesses are all down. Overall sales are off over 25 per cent year over year, yet we have been able to improve our operating margin rate performance. Titan’s liquidity remained stable during the quarter, with both cash and debt balances similar to Q1. This demonstrates we are on the right track.”
Further details regarding Titan International’s second quarter 2015 results can be found in our company profiles and reports section.