Continental alarmed by rise in rubber prices
The finance director of German auto parts group Continental rang on Tuesday an alarm over rubber prices in an interview with AFP, even as the company got back into the black in the first quarter.
"At the level of risks, there are two big questions for this year, commodity prices, especially for rubber ... and the trend in auto production," Wolfgang Schaefer said.
"We win when raw material prices fall and we suffer when they rise, which is unfortunately the case at present," he explained.
Rubber prices have climbed by around 14 percent since the beginning of the year to 320.25 US cents in Malaysia on Friday, and have gained a whopping 121 percent since January 2009.
"We are trying to pass on the increases but that always happens with a delay of up to six months," Schaefer said.
More than two-thirds of Continental's sales come from tyres, and the group has been slammed by "increases in natural rubber prices that we had never seen before," he added.
The German group nonetheless confirmed on Tuesday a return to profit in the first three months of the year, with a net figure of 227 million euros (300 million dollars), compared with a loss of 267 million in the same period a year earlier.
Sales reached nearly six billion euros and the group's auto parts division posted core earnings of 182 million euros, up from a loss of 266 million.
Continental benefitted from very solid sales by auto manufacturers ... and even advanced faster than the auto market" as a whole, Schaeffer said.
© 2010 AFP