UPDATE 3-Continental sees at least 100-million-euro hit from Iran war, tyre margins at risk

Apollo Global Management Inc

Apollo Global Management Inc

APO

0.00

Continental expects higher raw material prices at tyre unit

Raw material stockpiling among protective measures

Continental posts Q1 profit beat partly due to cost cuts

Adds context to lead paragraph, shares in 4, stockpiling in 6, CFO quotes on tariffs, ContiTech sale in paragraphs 7-9.

By Emanuele Berro and Simon Ferdinand Eibach

May 6 (Reuters) - Continental expects a hit of at least 100 million euros ($117 million) from the Iran war from the second quarter, the German car parts supplier said on Wednesday, as surging oil prices push up the cost of raw materials key to tyre production.

The war and resulting surge in oil prices have added to uncertainty across global industries, including for auto parts makers in Europe already grappling with U.S. tariffs, weaker demand, Chinese rivalry and supply chain disruptions.

Continental CONG.DE said it expected a hit in the "low-to-mid-triple digit million euro range" for its tyres business, with higher raw materials prices set to kick in from April.

Still, Continental shares surged over 7% in morning trading -- the biggest percentage gainer on the DAX index -- as its first-quarter profit beat expectations. Analysts at Jefferies and JP Morgan said the quarter benefited from cost cuts, lower raw material prices and a focus on high-margin tyres.

STOCKPILING MAY HELP OFFSET HIGHER PRICES

To offset the higher prices, Continental said it would focus on building stockpiles for critical raw materials.

In terms of U.S. import tariffs, finance chief Roland Welzbacher told Reuters the group expects an impact in the "mid to high double-digit million euro" range, should higher levies recently announced by President Donald Trump apply to tyres.

Continental is strategically realigning its business to shed non-tyre assets, with Welzbacher saying its rubber and plastic division ContiTech was expected to be sold by the end of 2026.

Bloomberg reported that private equity firms, including Apollo Global Management APO.N and Bain Capital, were weighing bids for ContiTech.

Adjusted pretax earnings were 522 million euros ($612.51 million), up 6.1% from a year ago, beating the 499.5 million euro analyst consensus provided by the company.

($1 = 0.8522 euros)


This page is machine-translated. Sahm tries to improve but does not guarantee the accuracy and reliability of the translation, and will not be liable for any loss or damage caused by any inaccuracy or omission of the translation. *Disclaimer: The above content only represents the author's personal position and opinion and does not represent any position of Sahm Capital Financial Company and Sahm cannot confirm the authenticity, accuracy, and originality of the above content. Investors should consider the risks of investment products in light of their circumstances before making any investment decisions. When necessary, please consult a professional investment advisor. Sahm does not provide any investment advice, nor does it make any commitments and guarantees.