29
July
2004
|
00:00
Europe/Amsterdam

H1 preliminary financial statements

BOARD OF DIRECTORS OF PIRELLI & C. SPA EXAMINED PRELIMINARY AND UNAUDITED FINANCIAL STATEMENTS FOR FIRST HALF ENDED 30 JUNE 2004 : TREND OF RESULTS CONFIRMED IN LINE WITH 2004-2006 TARGETS

 

 

  • FURTHER GROWTH OF OPERATING INCOME: +33%
  • IMPROVEMENT OF INDUSTRIAL ACTIVITIES: TYRES SECTOR POSTED ITS BEST QUARTERLY PERFORMANCE IN THE LAST TEN YEARS; ENERGY CABLES AND SYSTEMS SECTOR DOUBLED OPERATING INCOME
  • GROWTH ON NEW TELECOM SYSTEMS ACTIVITIES: REVENUES OF FIRST HALF 2004 STOOD AT SAME LEVEL OF FULL YEAR 2003 FIGURE (APPROX. 28 MILLION EUROS)
  • REAL ESTATE ACTIVITIES FURTHER GREW: +24% IN OPERATING INCOME INCLUDING INCOME FROM EQUITY PARTICIPATIONS
  • OLIMPIA RESULT POSITIVE THANKS TO TELECOM ITALIA DIVIDENDS CASHED IN SECOND QUARTER

  • FOR 2004, GROUP EXPECTS A SIGNIFICANT IMPROVEMENT OF RESULTS IN ALL ACTIVITY SECTORS, BOTH AT OPERATING AND NET LEVEL

    NET FINANCIAL POSITION WILL BE IN LINE WITH 2004-2006 TARGETS

    CONSOLIDATED RESULTS
  • REVENUES: APPROX. 3,570 MILLION EUROS, COMPARED TO 3,298 MILLION EUROS, UP 8.3%(+5.1% AT COMPARABLE CONDITIONS)
  • OPERATING INCOME (EBIT): APPROX. 190 MILLION EUROS, GROWING 33% WHEN COMPARED TO 142 MILLION EUROS IN SAME PERIOD 2003
  • NET FINANCIAL POSITION: NEGATIVE BY APPROX. 2,050 MILLION EUROS, IN LINE WITH TARGETS TAKING INTO ACCOUNT DIVIDEND PAYMENTS AND THE EXERCISE OF THE CALL OPTION ON TELECOM ITALIA SHARES

  • INDUSTRIAL ACTIVITIES
  • REVENUES: APPROX. 3,300 MILLION EUROS COMPARED TO 3,049 MILLION EUROS, UP 8% ( +4.5% AT COMPARABLE CONDITIONS)
  • OPERATING INCOME: APPROX. 193 MILLION EUROS, UP 43%, WITH ROS RISING TO 5.9% FROM 4.4%
  • TYRES: EBIT APPROX. 154 MLN EUROS (+19%), ROS AT 9.4%
  • ENERGY CABLES AND SYSTEMS: EBIT DOUBLED AT APPROX. 54 MILLION EUROS WITH ROS GROWING TO 3.7% FROM 2.1%
  • TELECOM CABLES AND SYSTEMS: EBIT IMPROVED: APPROX. -15 MILLION EUROS (OF WHICH -7 FROM SUBMARINE ACTIVITIES) AGAINST -21 MILLION EUROS IN FIRST HALF 2003

  • REAL ESTATE OPERATIONS
  • OPERATING INCOME INCLUDING INCOME FROM EQUITY PARTICIPATIONS: APPROX. 66 MLN EUROS, +24% YEAR OVER YEAR

 


Milan , 29 July 2004 - The Board of Directors of Pirelli & C. SpA today met and examined the company's consolidated financial statements for the first half ended 30 June 2004 , which are still preliminary and unaudited .

The Group Pirelli & C. SpA
First half of 2004 showed a strong improvement of all economic indicators, consistently with forecasts described in Outlook 2004-2006 . Consolidated revenues of Pirelli & C. SpA Group in first half amounted to approx. 3,570 million Euros , up 8.3% against the same period last year, posting growth in all activity sectors. On the same perimeter base - net of the effects of exchange rates and metal prices - revenues grew by 5.1%.

Operating income (EBIT) amounted to approx. 190 million Euros, up 33% when compared to 142 million Euros in first half 2003. Consolidated ROS - Return on Sales was 5.3% , further growing when compared to the 4.3% figure of 2003. It must be remembered that 2003 figure included 10 million euros from Ciena settlement.

The Olimpia SpA effect in first half 2004 was positive by approx. 52 million Euros (-45 million Euros in same period last year), thanks to Telecom Italia dividends, which were accounted for cash when received in second quarter, against financial charges of the period.

The net financial position at 30 June 2004 is negative by approx. 2,050 million Euros, against 1,745 million euros at year end 2003, but in line with 2004-2006 targets when taking into account dividend payments (approx. 128 million Euros), the call option on 47 million Telecom Italia shares exercised on 6 April 2004 (110 million Euros), and the subscription of Eurostazioni SpA capital increase (approx. 33 million Euros). The variation from first quarter 2004 figure (1,959 million Euros) is attributable mainly to the above mentioned operation on Telecom Italia shares, while cash flow of ordinary activities in second quarter balanced dividend payments and Eurostazioni operation. Net financial position at 30 June 2003 was 1,598 million Euros.

The industrial operations of the Group
Industrial operations posted a strong growth of operating income, thanks to performance of Tyres Sector, which recorded its best quarter in the last ten years and to Energy Cables and Systems Sector, which doubled its operating income benefiting of focus on higher value market segments. In Telecom Cables and Systems Sector a pressure on prices of fiber optic cables impacted on results, while new Telecom Systems activities grew in terms both of volumes and margins: revenues in first half 2004 stood at the same level as the full year 2003 figure (approx. 28 million Euros).

In first half 2004 the Industrial Activities sales revenues reached approx. 3,300 million Euros , up 8.2% when compared to H1 2003. On the same perimeter base (net of the effects of exchange rates and metal prices) revenues actually grew by 4.7% .

Operating income (EBIT) was approx. 193 million Euros , growing by 43% when compared to H1 2003. Return On Sale rose to 5.9 % against 4.4% in H1 2003.

Tyres Sector

Sales amounted to approx. 1,645 million Euros , compared to 1,509 million Euros in H1 2003 ( + 11.1% net of the effects of exchange rates and metal prices).

Operating income was approx. 154 million Euros, with a ROS of 9.4 %, an improvement of 19% compared to 129 million Euros in H1 2003.

Energy Cables and Systems Sector

Sales totaled approx. 1,450 million Euros , up 10.4% when compared to H1 2003 figure of 1,312 million Euros. On an equal basis figure is in line with last year's.

Operating income was approx. 54 million E uros , compared to the figure of 27 million Euros posted in the same period last year, with ROS growing to 3.7% with respect to 2.1% recorded in H1 2003.

Telecom Cables and Systems Sector

Sales revenues in first half 2004 were approx. 205 million Euros, down 10.1% when compared to 228 million Euros at 30 June 2003 (-8.5% on an equal basis). It should be mentioned that first half 2003 benefited from the invoicing of two submarine projects for approx. 40 million Euros.

O perating income was negative for 15 million Euros (of which -7 million related to submarine activities), posting an improvement when compared to -21 million Euros in H1 2003.

The Group's Real Estate operations I t is worth recalling that Pirelli RE is a management company which manages special purpose vehicles and funds owner of real estate and non performing loans portfolios, investing through minority stakes (asset management and fund management activity) and providing these and other clients with a range of real estate specialist services (service provider activity). Consequently, the aggregate production value net of acquisitions and EBIT including income from equity participations (pro-quota) are the most significant indicators of the business volume managed by the Group and results at operational level, respectively.

EBIT including pro-quota income from equity participations totalled approx. 66 million Euros, as compared with 53 million Euro in H1 2003, representing growth of 24% .

For further information of Real Estate activities, please refer to the press release issued by Pirelli & C. Real Estate on 28 July 2004 .

Forecasts for the 2004 fiscal year

Results of first half allow Pirelli to confirm forecasts for a further increase in results in all the activity sectors, both at operating and net level, unless extraordinary events currently not forecastable happen.

Net financial position will be in line with 2004-2006 targets.

Mr. Maurizio Romiti resigned from the Board of Directors starting from 15 September 2004 .

The Board of Directors that will examine definitive financial statements for the six months period ended on 30 June 2004 will meet on 9 September 2004 and not on 10 September 2004 as previously announced.

The above document will be published within 13 September 2004 and, consequently, in accordance with art. 82 of Consob resolution 11971/99 (with following modifications and integrations), the quarterly report for the second quarter 2004 will not be drawn up.

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