Pirelli reports falling quarterly sales

Pirelli reported market improvements for the third quarter of 2020, but the Italian tire manufacturer's results remain below last year's levels due to the impact of the Covid-19 pandemic, although the plan to improve efficiency and reduce costs has somewhat mitigated the impact of the pandemic on financial results.

In the third quarter, there was a noticeable improvement in the dynamics of revenue, according to the report Pirelli.

Sales in the third quarter fell 7.5% to 1.2 billion euros due to the negative impact of foreign exchange rates. According to Pirelli, the recovery in demand for high-priced premium and large-diameter tires partially offset the negative currency impact and a 12% decline in sales of standard tires.

Pirelli's premium tire sales rose 3.9% quarter-on-quarter and large diameter tire sales rose 4.3% in the OE segment, driven mainly by the Asia Pacific region, especially China and North America.

Sales of large diameter tires in the replacement market rose 6.1% in the quarter, in stark contrast to the 24% drop in the first quarter.

Adjusted profit in the third quarter fell 12% to € 214 million, and adjusted profit margin was 16.7%, down one percentage point from the same period in 2019.

Total net income rose 6.6% in the third quarter to € 83.9 million, Pirelli said.

In the first nine months of the year, the Italian tire maker's sales fell 23.4% to € 3.1 billion, driven by falling demand, especially in the second quarter, and by exchange rates. During the period, sales of premium tires decreased by 19%, while sales of standard tires decreased by 32.4%.

Overall, all volumes were down 20.7%, reflecting a 14.9% decline in the high-end segment and 26.4% in the standard tire segment.

Adjusted profit for the three quarters of 2020 was € 280.4 million, almost 60% less than in the same period last year. Profitability fell to 9.1% from 16.7% a year earlier.

Net income for the first nine months went negative to -17.8 million euros, which is in sharp contrast to last year's result of 386 million euros.