Pirelli & C. First quarter financial statements
Board Of Managing Partners Meets
Quarterly Report Approved:
Consolidated Results At 31st March:
Sales Revenues: 1,572 Million Euros: Up 1.2% Net Of Exchange Rate, Metal Prices And Consolidation Area Effects; Down 10% Overall
Ebit: 61 Million Euros (3.9% Of Sales) Against 44 Million (2.5% Of Sales) In 2002
Ebit Including Income From Equity Investments: Stronlgy Increases (From 25 Million Euros In 2002 To 50 Million Euros)
Net Result: 6 Million Euros Gain Pre-Olimpia And Extraordinary Charges; 27 Million Euros Loss Post-Olimpia And Extraordianry Charges (1 Million In First Quarter 2002)
Net Financial Position: Negative By
2,302 Million Euros In Line With 31st March 2002 (2,294 Million Euros), Compared With 2,050 Million Euros At 31st December 2002Tyres: Ebit Up 20.4%, Net Result Up 39%
Energy Cables And Systems: Ebit Totals 8 Million Euros (1 Million In First Quarter 2002), Net Result 2 Million Euros (17 Million Loss In 2002)
Telecom Cables And Systems: Negative Trend Continues In Tlc Components Sector
Real Estate Sector: Ebit Including Income From Equity Investments Shows Strong Growth (Up 27%), As Does Net Result (Up 26%)
Milan, 7th May 2003 - Pirelli & C. Apa's Board of Managing Partners met today and approved the Group's quarterly report at 31st March 2003.
The Group's Results
Sales revenues amounted to 1,572 million euros at 31st March 2003, showing a fall of 10 % in comparison with the same period for 2002.
Keeping into account the variation in exchange rates (- 8.3%), in metal prices for the Energy Sector (-1.5%) and in variation of consolidation area due to the sale of Enamelled Wires Business (-1.4%), sales grew 1.2%. The Pirelli SpA Group has contributed 1,449 million Euros to this figure (against 1,688 million during the first three months of 2002) and the Pirelli & C. Real Estate Group has contributed 127 million Euros, showing a 101% increase on sales revenues for the first three months of 2002 (63 million Euros).
It should be remembered, however, that in the real estate sector, sales are not representative of the volume of business since the activity has grown primarily through the acquisition of qualified minority shareholdings in companies owning real estate assets the management of which has been entrusted to Pirelli & C Real Estate. The volume of business managed by the real estate sector therefore is more significantly expressed by the aggregated production value (sum of sales revenues and inventory variations), which also includes the part attributable to the minority participations managed. The aggregated production value amounted to 355.7 million Euros, net of acquisitions, up by 73% in comparison with the 205.9 million Euros during the first three months of 2002. Such value, including acquisitions, amounts to 504.6 million Euros.
EBITDA equals 153 million Euros (9.7 per cent of sales), in comparison with 149 million Euros (8.5 per cent of sales) in the first three months of 2002.
Operating income amounts to 61 million euros (equal to 3.9 per cent of sales) against 44 million euros (2.5 per cent of sales) during the first quarter of 2002.
The results from investment holdings, negative to the tune of 11 million euros against 19 million for the 2002 quarter, include the Olimpia SpA effect on Pirelli SpA which was negative to the tune of 25 million euros. The results for the companies in the real estate sector, on the other hand, were positive to the tune of 14 million euros net of tax (against 7 million in 2002).
EBIT including income from equity interests has doubled to 50 million euros, in comparison with the figure of 25 million euros for the first three months of 2002. The Pirelli S.p.A. Group has contributed to such a result with a profit of 34 million euros (15 million in 2002) and the Pirelli & . Real Estate Group with one of 25 million euros (20 million at 31st March 2002). Excluding the Olimpia effect, the result equals 75 million euros (52 million in 2002).
The financial charges and income amounted to 36 million euros against one of 39 million euros at 31st March 2002.
The extraordinary charges and income figure showed a deficit of 8 million euros at the quarter's end, against a credit of 48 million for the corresponding period last year.
The net income at 31st March 2003 shows a deficit of 27 million euros against a positive income of 1 million euros during the corresponding period last year. Excluding the Olimpia effect (25 million euros) and extraordinary charges (8 million euros), the result is positive to the tune of 6 million euros.
The Pirelli & C. Net Income after Minorities shows a deficit of 15 million euros (corresponding to 0.02 euros per share), against a positive income of 21 million in the first quarter of 2002 (0.03 euros per share).
Shareholders' equity goes from 4,626 million euros at 31st December 2002 to 4,467 million euros at 31st March 2003.
The net financial position at 31st March 2003 shows a deficit of 2,302 million euros, essentially in line with the figure for 31st March 2002 (2,294 million) and compares with one of 2,050 million euros at 31st December 2002. The variation on the figure at 31/12/2002 is to be attributed mainly to seasonal factors (that have caused an increase in working capital) and outlays relating to re-organization programmes as well as the purchase of Pirelli S.p.A. shares from the BZ Group for the sum of 43 million euros.
The industrial sectors have confirmed their priority commitment to research and technological innovation despite the unfavourable conditions, sustaining Group costs of 50 million euros (3.2 per cent of turnover) during the first quarter of 2003.
The Group's personnel numbered 35,767 employees at 31st March 2003, against 37,050 individuals at 31st December last year.
Important events occurring during the quarter
In accordance with agreements reached in March 1998, BZ Group exercised its second option to sell a number of ordinary Pirelli S.p.A. shares equal to 2.5% of the capital stock with voting rights to Pirelli & C. at a price calculated (according to the agreements) on the average of the stock-market share quotation over the 90 sessions preceding the exercise date, for an amount totalling approximately 43 million euros (equal to a price of 0.90 euros per share).
Following the transaction referred to above, Pirelli & C. Apa holds (directly and indirectly) 800,191,375 ordinary Pirelli S.p.A. shares, equal to 41.7% of the capital stock with voting rights.
Activity evolution for the year under way
In a market scenario still characterised by uncertainty, the results achieved during the first quarter can today confirm the objective of increasing operating income for the Tyre as well as the Energy Cables and Systems Sector during the current year and of seeing the Telecom Cables and Systems Sector break even in the final quarter. As regards the real estate sector, on the basis of available information, it is considered reasonable to expect EBIT including income from pro-quota equity interests to show further growth against the previous accounting year.
The net result for the Holding Company Pirelli & C. is positive to the tune of 0.9 million euros at 31st March 2003, against 0.6 million for the first quarter of 2002.
For a more complete account of the trends for the main subsidiary companies, Pirelli S.p.A. and Pirelli & C. Real Estate, please refer to the related press releases issued on 5th and 6th May respectively.
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