November 14, 2018 / 5:04 PM / a month ago

Pirelli 9-mth earnings rise, guidance tweaked because of Latam weakness

MILAN, Nov 14 (Reuters) - Italian tyremaker Pirelli on Wednesday posted a 7.5 percent increase in nine-month adjusted operating profit before start-up costs as a better product mix and efficiencies helped offset higher raw materials costs and currency fluctuations.

Pirelli, which makes tyres for Formula One racing teams and premium automakers like BMW and Audi, said adjusted operating profit before start-up costs was 732.1 million euros ($828 million), roughly in line with an analyst consensus provided by the company. Profit margin increased to 18.7 percent from 16.9 percent a year ago.

Sales fell 2.8 percent to 3.93 billion euros, in line with expectations, but were up 4.4 percent excluding currency swings and accounting changes.

The company confirmed its profitability targets for this year, but lowered its forecast for sales to around 5.2 billion euros down from a previous forecast of around 5.4 billion euros due to worsening environment in South America.

Net debt guidance was also slightly revised to around 2.35 times adjusted EBITDA before start-up costs, from around 2.3 times guided before, again due to South America. ($1 = 0.8841 euros) (Reporting by Agnieszka Flak; editing by Francesca Landini)

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