TRELLEBORG, Sweden — Trelleborg A.B. reported a 21.1-percent increase in pre-tax operating income for the quarter ended June 30, reflecting the impact of operations acquired in the past year and a positive currency exchange rate effect.
Operating income rose to $123.7 million, while sales jumped 26.3 percent to $938.7 million, resulting in a slight decline in the operating margin, to 13.2 percent from 13.7 percent.
Trelleborg attributed the sales gain primarily to the effects of structural changes, which contributed a positive 20 percent, with the acquisition of Czech tire and rubber goods maker CGS Holding last summer accounting for the main part of this increase.
Exchange rate effects accounted for a positive 3 percent contribution to sales compared with the year-earlier period.
Net profit for the Group totaled $83.7 million.
For the six months ended June 30, the pre-tax operating income jumped 66.9 percent to $287.8 million; the increase was buoyed by a one-time capital gain of $54 million from the divestment of a compounding operation in Czech Republic.
Sales for the half year jumped 31 percent to $1.88 billion.
Trelleborg Wheel Systems reported a 49.5- and 64-percent gains in operating income for the quarter and half year, to $31.6 million and $63.8 million, respectively, improvements Trelleborg attributed to the consolidation of the CGS tire operations and higher volumes in primarily agricultural tires
Sales for the business unit jumped 60.3 and 79.2 percent to $268 million and $532.7 million, respectively, for the quarter and half year. Organic sales for the quarter increased 8 percent, Trelleborg said.
Overall, sales of agricultural tires increased to both OEMs and the aftermarket in all geographic regions. Sales of tires for materials-handling vehicles and construction equipment increased slightly during the quarter.
Sales increased in both Europe and North America.
The significant fluctuations in raw material prices in the first six months had a negative impact on earnings and the EBIT margin.
Efforts to compensate for this are under way, Trelleborg said, but were unable to fully offset the effects in the second quarter. In the late spring and summer, raw material prices have fallen significantly, which has created uncertainty concerning the strategies of the various operators in the market.
During the quarter, the business area launched a more market-oriented organizational structure aimed at leveraging, in the long term, the new opportunities brought about by the acquisition of the CGS tire operation.
Regarding the rest of the year, Trelleborg President and CEO Peter Nilsson said Trelleborg would continue to "carefully monitor economic developments and maintain a high level of preparedness to manage fluctuating market conditions."