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Continental Releases 2005 Financial Results

(Akron/Tire Review) International automotive supplier Continental AG released its 2005 financial results, which showed an increase of 30.2% in operating income and a 9.8% increase in consolidated sales.

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Operating results increased to $1.9 billion, and consolidated sales rose to $17.2 billion from the previous year, Continental reported.

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The passenger and light truck tire division increased sales to $5.5 billion, from the prior year number of $5.1 billion. Operating result increased by 57.5%, to $832 million.

“The division increased its sales by 3.9% to 106.2 million tires,” Continental said in a release. And, business in the NAFTA region developed positively, it added.

“All told, in the fourth quarter of 2005, we still almost reached the operating break-even point we were aspiring to,” said Alan Hippe, president and CFO of Continental Tire North America (CTNA). “We expect that, during this year, more progress will be achieved and we can stabilize this positive trend. More efficient cost structures will help, as will the new plant in Brazil, where production has started.”

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The commercial tires division showed a sales decline of 8.1% to $1.7 million, Continental also reported. However, the division improved its operating result by 47.1% to $190 million. Global truck tire sales rose by 1.7% to 6.7 million units.

In North America, the OE commercial tire business grew by 9.9%, but the replacement business declined by 0.9%, according to Hans-Joachim Nikolin, the executive board member responsible for the division.

“We anticipate continued growth in consolidated sales and further improvement in group operating result in fiscal 2006,” said Manfred Wennemer, chairman of Continental’s executive board. “All divisions will contribute to these results.”

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“In 2006, the subject of acquisitions will continue to top our list,” he added. “We intend to actively manage containment of anticipated raw material price rises; this will also have to include price increases.”

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