Continental flags $117 million hit as Iran war drives up raw material prices
Continental Faces Financial Pressure Amid Middle East Conflict
By Emanuele Berro and Simon Ferdinand Eibach
Impact of the Iran War on Raw Material Prices
May 6 (Reuters) - Continental expects a hit of at least 100 million euros ($117 million) from the Middle East conflict with Iran, the German car parts supplier said on Wednesday, adding its core tyres division would feel the impact of higher raw material prices from the second quarter onwards.
Rising Oil Prices and Industry Uncertainty
The war has exacerbated uncertainty across global industries, prompting a sharp rise in oil prices. Continental relies on oil-derived raw materials for its tyre production.
Additional Challenges for European Car Parts Makers
The crisis has added to the woes for car parts makers in Europe, already grappling with U.S. tariffs, weaker demand, intensifying competition from Chinese rivals and supply chain disruptions.
Continental's Response and Financial Performance
Expected Financial Impact on Tyres Business
Continental said it expected a blow in the "low-to-mid triple digit million euro range" for its tyres business, saying higher raw materials prices were expected to kick in from April.
Measures to Safeguard Earnings
"It will take time for recent changes in raw material prices to have an impact on us. We are analysing and assessing the situation and, where necessary, are taking measures to safeguard earnings," Chief Financial Officer Roland Welzbacher said.
First Quarter Results and Outlook
The Hanover-based company posted higher-than-expected operating profit for the first quarter, citing cost cuts, lower raw material prices and a focus on high-margin tyres, also confirming its full-year outlook.
Adjusted Earnings and Analyst Consensus
Adjusted earnings before interest and tax were 522 million euros ($612.51 million), up 6.1% from the 492 million in the same quarter of 2025, beating a 499.5 million euro analyst consensus provided by the company.
($1 = 0.8522 euros)
(Reporting by Emanuele Berro and Simon Ferdinand Eibach in Gdansk; editing by Christoph Steitz and Christian Schmollinger)
