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Pirelli reduces revenue forecast for 2025 due to currency impact

Pirelli, the Italian tire manufacturer, lowered its revenue forecast for 2025 on Thursday as a result of expected adverse currency movements.

The company has lowered its target to an estimated range of 6.7-6.8 million euros ($7.66-7.78 million) compared to its previous target of 6.8-7.0 millions euros.

Pirelli reported that currency fluctuations caused a 2.9% loss in revenue compared to the first half of last year due to the weakening of the U.S. Dollar and the volatility of currencies of emerging countries against the euro.

The firm has confirmed that it aims to achieve a margin of adjusted EBIT around 16 percent for the entire year.

Why it's important

Pirelli reported that 9 of the 15 board members voted in favor, while the Sinochem-linked members including Chairman Jiao Jian voted against.

Chinese and Italian investors are fighting over the governance of the group. Sinochem, the state-controlled Chinese company, is Pirelli's biggest investor, with 37%, and Camfin, the Italian businessman Marco Tronchetti Provera's vehicle, has 27.4%.

Camfin says that Pirelli's large Chinese presence is a threat to their ambitions to expand in the United States. Over 20% of the firm's revenues are generated in North America.

By the Numbers

According to company data, Pirelli, which is the only supplier of Formula One tyres, reported a core profit for the second quarter (adjusted EBITA) of 278.5 millions euros. This was up 0.7% on the previous year and exceeded the consensus estimate of 274million euros. The quarter's core profit margin was 16%.

The Milanese firm's net profit for the second quarter was 136.8 millions euros, which is above the consensus of 123 million euro, and its revenues were 1.74 billion euros. This is in line with expectations.

(source: Reuters)