The week of the Italian quarterly reports continues with Pirelli closing the third quarter with revenues of 1,277 billion euros, down by 1,5% at the organic level and by 7,5% with exchange rate effect). A possible figure "thanks to the recovery of High Value demand and the price/mix", explains the company in a note.
down tooadjusted ebit, which fell from 244,5 to 213 million euros, while the Adjusted Ebit margin was 16,7% (17,7% in the 3rd quarter of 2019) "thanks to the contribution of internal levers".
The net result up 83,9 million (+6,6%) from the previous 78,7 million and the cash flow is positive for 12,2 million euros (+11,6 million in the third quarter of 2019).
The results beat the consensus of analysts who expected quarterly revenues of 1,23 billion with an adjusted EBIT of 206 million and a positive net result of 68 million.
The board of directors of the company led by Marco Tronchetti Provera has also approved the accounts for the nine months which show revenues down by 19,3% at an organic level (-23,4% with exchange rate effect) to 3,093 billion. Adjusted EBIT dropped from 685 to 280,4 million euros "thanks to the contribution of efficiencies and cost containment actions that limited the impact of the drop in demand and the slowdown", explains Pirelli.
Finally, the net result, this time negative for 17,8 million (+385,7 million euros as at 30 September 2019). Even over the nine months, the accounts exceed the expectations of analysts who estimated 3,047 billion in revenues, 273 million in adjusted EBIT and a net loss of 34 million. The net financial position in September was expected to be negative by 4,254 billion.
For the whole of 2020, Pirelli estimates revenues in a range of 4,18-4,23 billion (previous guidance calls for 4,15-4,25 billion) with an adjusted ebit margin at 11,5-12% versus 12-13 % previously expected "due to the impact of exchange rates, raw materials and the increase in other partly non-monetary costs". The group also confirms that it will achieve cash flow generation of approximately 190-220 million euros and bring the net financial position to -3,3 billion euros from -4,252 billion at the end of September (-4,264 billion as at 30 June 2020).
As regards 2020 volumes, Pirelli estimates a group decline of between 17 and 18% on 2019 and therefore slightly better than the -18-20% previously indicated. This perspective derives from a slightly higher market outlook than that provided previously with a contraction of the car market of 17% in 2020 (from the previous -19%) made up of -18% of original equipment and -16% of spare parts .
In Piazza Affari, shortly before the release of the quarterly, the Pirelli stock closed the session with an increase of 1,09% to 4,279 euros, while in the session of 12 November it slipped to the bottom of the Ftse Mib, recording a decrease of 5,6% to 4,04 euros despite the fact that the third quarter result exceeded analysts' expectations.
(Last update: 11.20 am on 12 November).
