Pirelli quarterly earnings rise, but Chinese directors oppose report

(Alliance News) - Pirelli & C Spa on Wednesday confirmed guidance after a stronger first quarter, despite opposition to its report from Sinochem-affiliated directors over the implementation of Italy's Golden Power rule.

The Milan-based tyre manufacturer said adjusted earnings before interest and taxes rose 6.5% to EUR279.8 million from EUR262.6 million euro due to a solid commercial performance of volumes and price/mix and efficiencies.

Adjusted Ebit margin was 15.9% compared to 15.5% in the first quarter of 2024.

Net profit rose 27% to EUR127.2 million from EUR100.4 million in the quarter, as revenue increased 3.7% to EUR1.76 billion from EUR1.70 billion.

The net financial position was minus EUR2.62 billion compared to minus EUR2.94 billion on March 31.

Looking ahead, Pirelli confirms 2025 guidance of revenue between EUR6.8 billion and EUR7.0 billion; adjusted Ebit margin of 16%; and net financial position of EUR1.6 billion.

This is compared to 2024 revenue of EUR6.77 billion, net profit of EUR501.1 million and adjusted Ebit margin of 15.7%. Net financial position was minus EUR1.93 billion on December 31.

Regarding tariffs, Pirelli said there remains "uncertainty over the duration and the effective impact of tariffs in view of the constantly ongoing scenario, with negotiations between the USA and its main commercial partners."

Pirelli has a mitigation plan "to guarantee, in case current tariffs persist, Adjusted Ebit target and cash flow at the lower end of guidance, achieving the deleveraging target," it added.

Six directors, including Chair Jiao Jian did not support the report's publication in light of the Italian government's April decision to wrest control of Pirelli from 37%-stakeholder Sinochem.

Prime Minister Giorgia Meloni had used Italy's "Golden Power" rule on national security grounds, citing Pirelli's work in cyber tyre technology.

The directors disapproved of the report's classification of Sinochem control over Pirelli having ended.

In April, Pirelli had said the decision was a "first, but not decisive" step on the path to the necessary adjustment of company governance to regulatory constraints in the US.

It called the US a "key" market in the high value tyre segment and for the development and distribution of cyber tyre technology.

Pirelli shares closed up 1.1% at EUR6.13 in Milan on Wednesday

By Aidan Lane, Alliance News reporter

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