Pirelli Cables focuses on advanced applications

13 May 2002 -- Pirelli Group, Milan, Italy, says that, in Q1/2002, its Telecom Cables and Systems sector made an operating loss of Euro2m compared to a profit of Euro81m a year ago.

May 13th, 2002

13 May 2002 -- Pirelli Group, Milan, Italy, says that, in Q1/2002, its Telecom Cables and Systems sector made an operating loss of Euro2m compared to a profit of Euro81m a year ago. This was on sales of just Euro164m - down 58.9% on a year ago, due to volumes (39.5%), prices (4.9%) and a poorer mix (14.1%).

Pirelli's chief executive Marco Tronchetti Provera last week told market analyst Dow Jones that he does not expect the telecommunications cable industry to recover this year. "We don't see a recovery in optical fibres in 2002. In 2003, we'll see some signs of improvement but not a true recovery."

Pirelli's market outlook has changed from a few months ago, it says, with expectations of recovery by end-2002/start-2003 now limited. Pirelli therefore aims to: focus on major customers and areas with greater growth potential; develop a strong presence in access network markets through advanced optical solutions; and increase sales of new products based on advanced technologies.

The company aims to increases sales of microcables, high-density fibre cables, "AirBag" protection cables, special fibre-to-the-home cables and new-generation optical and optoelectronic components from 20% of sales to 35-40%.

Also, Pirelli Labs has launched research projects on new-generation optical components and chips. Group R&D costs rose from Euro55m in Q4/2001 to Euro59m in Q1/2002. This fits with its 2002-2004 plans for high-tech activities to increase their share of Pirelli's business from 35% to 40% of sales.


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