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UPDATE 1-Pirelli cuts sales forecast on European slowdown
November 12, 2012 / 8:30 PM / 5 years ago

UPDATE 1-Pirelli cuts sales forecast on European slowdown

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MILAN, Nov 12 (Reuters) - Italian tyre maker Pirelli has trimmed its sales forecast for 2012 and raised its net debt target as the ongoing economic slowdown in southern Europe takes its toll on volumes.

Pirelli, headed by Marco Tronchetti Provera, said on Monday it had trimmed its full-year revenue target to 6.15 billion euros from a previous 6.4 billion euros, reflecting in part its exit from the more volume-based standard tyre sector.

Pirelli, the world’s No. 5 tyremaker, is shifting its focus to the more profitable premium sector where it counts on being a global leader in 2015.

The company is planning further expansion in developing countries.

Earlier on Monday sources said Tronchetti Provera, who controls Pirelli through a complex shareholding structure, is slated to go to trial over a long-running probe into alleged use of Telecom Italia data when he was head of that firm.

The Pirelli No. 1, who headed the Italian telecom incumbent from 2001 to 2006, said he is confident the trial will show he was not guilty of any wrongdoing.

In a statement, Pirelli said it expected net debt for the year to be equal to or above 1.2 billion euros compared to a previous forecast of less than 1.1 billion euros.

Several debt-related issues have emerged in the Pirelli control chain.

Camfin, which controls Pirelli, recently sold a bond to repay debt and invest in a rescue deal for loss-making real estate group Prelios in which it has 14 percent.

Tronchetti Provera controls Camfin along with minority partner the Malacalza family. The two partners were allies until a spat blew up in August.

Operating profit in the first nine months rose 31 percent to 592.8 million euros, boosted by a 13.5 percent rise in premium sector volumes, Pirelli said.

The company said it expected operating profits for the full year to be around 800 million euros compared to a previous target of at least 800 million euros.

Reporting By Stephen Jewkes; editing by Andrew Hay

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