Pirelli Tyre Holding First-Half Loss To Exceed $25 Million
MILAN, Italy (AP) _ Pirelli Tyre Holding NV said Tuesday it expects to post a loss of more than $25 million for the first half of the year.
The Netherlands-based holding for the worldwide tire interests of Italy’s Pirelli SpA group blamed the bleak outlook on reduced profit margins and higher financial charges stemming from an ongoing restructuring program.
Pirelli Tyre didn’t make a specific earnings forecast, but said ″the interim result is expected to be lower than the result of the second half of 1990,″ when it incurred a $25 million loss.
Pirelli Tyre Holding also said it doesn’t expect a ″significant upturn″ in the second half and that, despite some improvements in South America and in the European replacement market, full-year results will be hurt by restructuring provisions.
The company didn’t provide a forecast for the full year, but analysts said the its bearish outlook doesn’t bode well.
Philip Ayton, European motors and tires analyst with Barclays de Zoete Wedd in London, said the company will face more special provisions to restructure and cut operating costs, mostly by cutting jobs. Pirelli Tyre had said it plans to reduce its work force by 3,500 from mid-1990 to the end of 1991.
Ayton also said market conditions, especially in the United States, remain tough for the tire industry.