August 7, 2018 / 4:09 PM / 9 months ago

Pirelli says profit, margins rise in first six months

FILE PHOTO A view of the plant of Pirelli tires inside the Santa Fe Industrial Park in Silao, in Guanajuato state, Mexico, November 8, 2017. REUTERS/Edgard Garrido/File Photo

MILAN (Reuters) - Italian tiremaker Pirelli (PIRC.MI) on Tuesday posted a 6.8 percent rise in first-half adjusted operating profit before start-up costs as a better product mix and efficiencies helped offset higher raw materials costs and currency fluctuations.

Pirelli, which makes tires for Formula One racing teams and premium automakers like BMW (BMWG.DE) and Audi, said adjusted operating profit before start-up costs was 473.3 million euros ($549 million), compared with an analyst consensus provided by the company of 466 million euros. Profit margins increased to 18 percent from 16.5 percent a year ago.

Sales fell 2 percent to 2.63 billion euros, compared with a consensus of 2.64 billion euros, but were up 5.5 percent excluding currency swings and accounting changes.

The company confirmed its profitability and net debt targets for this year, but lowered its forecast for organic sales growth thanks to the shift toward the more profitable premium tire segment.

The company now forecasts organic revenue growth of around 7 percent, down from a previous guidance of at least 9 percent.

($1 = 0.8623 euros)

Reporting by Agnieszka Flak; editing by Stephen Jewkes

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