Brembo open to further investment in Chinese JV as H1 profit tops forecast (updated)
28/07/2022 16:23
* H1 revenues rose 28% to 1.75 bln euros
* H1 EBITDA up 13% to 305 mln euros
* EBITDA margin down at 17.5%
* Co has announced JV in China with Gold Phoenix
(Adds chairman comments)
MILAN, July 28 (Reuters) - Brembo BRBI.MI could consider
expanding its investment in a newly announced joint venture in
China with Gold Phoenix, its executive chairman told Reuters
after the Italian brakes maker posted a 13% rise in first-half
core earnings.
Brembo this week said it and Gold Phoenix 603586.SS had
agreed to create a 50/50 JV to build in China Brembo's first
large scale facility fully dedicated to producing pads for the
aftermarket, with an overall investment of about 35 million
euros over the next three years.
Brembo's Matteo Tiraboschi said that the market was
"potentially huge".
"It might be that we decide to invest more than we have
announced, and that this JV sees an acceleration compared to
what we have initially imagined."
In the first half of the year Brembo's earnings before
interest, tax, depreciation and amortisation (EBITDA) rose to
305 million euros, helped by a 28% jump in sales and strong
performance across all sectors.
Both sales and EBITDA exceeded an analysts' consensus
provided by Intesa Sanpaolo.
Shares in the company rose as much as 6.6% after results
were published and were up 3% by 1505 GMT.
EBITDA margin however weakened slightly to 17.5% from 19.9%,
as a consequence of rising raw material costs.
"We are recovering part of the higher costs of raw
materials, energy and logistics, which have hugely increased
since the beginning of the year," Tiraboschi said. "But they
keep rising, so we're somehow trailing".
The company said its order backlog remained robust and it
expects a second half in line with the first six months in terms
of revenues and margins, barring any extraordinary changes in
the geopolitical situation, exchange rates and costs.
This means a full-year target of around 3.5 billion euros
for revenues and of 600 million euros for EBITDA, Tiraboschi
said.
(Reporting by Agnieszka Flak and Giulio Piovaccari
Editing by Keith Weir)
((giulio.piovaccari@thomsonreuters.com))