Continental auto parts lifts target despite rubber prices
German auto parts group Continental raised its full-year sales target on solid quarterly results on Wednesday, but warned that soaring commodities prices and debt were a serious handicap.
The electronics and tyre specialist now sees 2010 sales of more than 25 billion euros (35 billion dollars), an increase of about 20 percent from a previous estimate of 15 percent.
Net profit is expected to reach just 400 million euros however, down from 1.16 billion last year, owing to higher tax rates and reimbursements, a statement said.
For the third quarter of 2010, Continental posted a 20-percent gain in sales to 6.49 billion euros and a net profit of 14 million euros.
In the same period last year it suffered a net loss of one billion euros.
Looking ahead, Continental warned that red-hot rubber prices would weigh on its tyre unit.
The impact will "exceed 450 million euros for the rubber group for the entire year 2010," the statement said.
"In the remaining months of this year, it will be possible to only partially offset this impact with mix improvements, increases in efficiency and the price increases that have already been announced," it added.
Meanwhile, Continental's net debt stagnated at eight billion euros and cost the group 531 million euros in interest payments in the first nine months of the year, it said.
© 2010 AFP