February 26, 2018 / 1:38 PM / 9 months ago

Pirelli expects stable 2018 growth after full-year profit jump

FILE PHOTO: A Pirelli tyre is seen before a ceremony at the Milan Stock Exchange, in Milan, Italy, October 4 , 2017. REUTERS/Massimo Pinca/File Photo

MILAN (Reuters) - Italian tyre company Pirelli (PIRC.MI) expects adjusted operating profit of at least 8 percent this year, maintaining stable growth through its focus on high-margin premium tyres.

The company reported a 9.7 percent rise in 2017 adjusted operating profit to 926.6 million euros ($1.14 billion), which it said was in line with its forecast of about 930 million euros.

Shares initially fell 2 percent but quickly recovered to show little change on the day.

Pirelli has focused on high-value tyres for Formula One racing teams and premium automakers since its less profitable industrial unit was hived off as part of a 2015 takeover by China National Chemical Corp (ChemChina).

Premium tyres accounted for 57.5 percent of 2017 revenue of 5.35 billion euros, the company said, adding that it expects to lift the contribution to 60 percent this year.

Selling more high-margin products and improving efficiency more than balanced out the effects of increases in raw material costs, cost inflation and amortizations, the company said.

One of Italy’s best-known brands, Pirelli returned to the stock market in October, two years after the ChemChina buyout.

Reporting by Isla Binnie; Editing by David Goodman

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