MILAN, Italy — Pirelli & C. S.p.A. reported a slight gain in operating income for the six months ended June 30 on 10.6-percent higher sales.
The firm's pre-tax operating income rose 0.7 percent to $451 million on sales of $2.91 billion, for an operating ratio of 15.5 percent.
Pirelli attributed the slight improvement to the positive effect of internal levers (such as price/mix, volume growth and efficiencies) which offset increases in the cost of raw materials, inflation, greater amortizations and start-up costs.
Among the specific costs cited was the conversion of car tire production at the Aeolus Tyre Co. Ltd. plant in Jiaozuo, China, to the Pirelli brand, and the relaunch of a bicycle tire business.
The sales revenue increase was buoyed by volume increases in the firm's high-value products (up 13.2 percent), which offset a drop of 4.7 percent in "standard" products. Overall, the volume increase was a modest 1.3 percent.
Sales revenue also benefited from an improvement in the price/mix component, Pirelli said.
Pirelli is planning to launch an initial public offering on the Borsa Italiana in October, with up to 40 percent of the firm's equity capital involved.
The IPO plan envisages Pirelli's becoming a "pure consumer tire company focusing on high value products."
High-value products include four categories: Prestige, developed in partnership with prestige car makers, namely Ferrari, Bentley, Bugatti and Rolls Royce; New premium, which includes tires with rim diameters of 18 inches or more; Specialty tires, including run-flats and color editions; and Premium moto, which are high-end motorcycle tires.