Triple whammy of problems likely to have impact on Titan’s profits

WORCESTERSHIRE-based wheel manufacturer Titan Europe is putting on a brave face despite uncertainty in the European market, damage to one of its factories from the Italian earthquake and depressed trading conditions in China.

In a trading statement the firm – which has just resumed manufacturing at its Italian agricultural large wheel factory following damaged caused by the recent earthquake – said it is continuing to manage customer supplies with the use of extensive internal and third party resources and working closely with its insurance and loss recovery partners to ensure that the financial impact of the earthquake on the business is minimised.

“Despite this excellent recovery work, we cannot realistically anticipate that there will be no volume loss in the short term,” it said.

Turning to China it said that depressed trading conditions in construction equipment manufacture in the country have greatly reduced its sales values into the region.

“Furthermore, to avoid ‘dead stock’ we have had to incur considerable extra cost as we re-export components made in Europe,” it said.

A corollary to this Chinese problem is the attempts by Chinese and other Asian manufacturers to export components previously aimed at the local market into the low-cost end of the worldwide aftermarket, Titan stated.

The firm suggests its sterling consolidated trading profit will be materially below current market expectations.