While this was slightly better than the market watchers feared, raw materials rose by more than expected, ruling out any advantages.
Even the $4.3 million Cooper is believed to have gained as a dividend from its shares in Kumho was not enough to offset the higher raw material costs.
“Based on spot prices for natural rubber (which accounts for 20% of raw material costs for tyre manufacturers), we anticipate additional pressure on tyre companies’ margins in the second quarter,” the analysts commented.
The Deutsch Bank analysts noted: “Q1 is a seasonally tough quarter from a cash-flow perspective.”