(Reuters) -Italian tyremaker Pirelli trimmed its 2025 revenue forecast on Thursday due to the expected impact of adverse currency movements.
The company lowered its guidance to a range of around 6.7-6.8 billion euros ($7.66-7.78 billion) from its previous target of around 6.8-7.0 billion euros.
Pirelli said that adverse currency movements accounted for a 2.9% revenue loss compared to last year’s first-half due to the weakness of the U.S. dollar and the volatility of emerging country currencies against the euro.
However, the firm confirmed its target to achieve an around 16% adjusted EBIT margin for the whole year.
WHY IT’S IMPORTANT
Pirelli flagged that the results were approved with 9 out of 15 votes from board members, with opposition from the Sinochem-linked members, including the Chairman Jiao Jian.
Chinese and Italian shareholders are in a dispute over the group’s governance. China’s state-controlled Sinochem is Pirelli’s largest investor with a 37% stake, while Camfin, the vehicle of Italian businessman Marco Tronchetti Provera, holds 27.4%.
Camfin claims that a large Chinese presence in Pirelli poses a threat to its ambitions to expand its business in the United States. The firm makes over 20% of its revenues in North America.
BY THE NUMBERS
Pirelli, the sole supplier of tyres for Formula One cars, posted a second-quarter core profit (adjusted EBIT) of 278.5 million euros, up 0.7% year-on-year, topping analysts’ consensus forecast of 274 million euros, according to data provided by the company. The core profit margin for the quarter came in at 16%.
The Milan-based firm’s second-quarter net profit came in at 136.8 million euros, above a 123 million euros consensus, while its revenues totalled 1.74 billion euros, matching estimates.
($1 = 0.8742 euros)
(Reporting by Romolo Tosiani in Gdansk; Editing by Matt Scuffham)
