Sept. 25, 2006 – Finance Digest

Piaggio net income up 26.3 percent in first half
Piaggio & C SpA said net income for the six months ended June 30 was Euro 64.4 million ($81.7 million), up 26.3 percent from net income of Euro 51 million for the same six months of the prior year.
Aided by the launch of new units from Aprilia and Moto Guzzi as well as an increase in sales of light commercial vehicles in Europe and in India, the Italian manufacturer’s sales were Euro 903.3 million ($1.1 billion), up 10.9 percent from Euro 814.3 million a year earlier.
First-half EBITDA rose 9 percent to Euro 135 million ($171 million), and operating profit was Euro 92.7 million ($117 million), up from Euro 78.4 million. Net financial debt dropped Euro 85 million, from Euro 411.4 million ($525 million) on Dec. 31, 2005 to Euro 326.2 million on June 30.
Piaggio Chairman Roberto Colaninno said the company plans to focus on operations in India, China and North America in 2007.
Piaggio & C. SpA was listed on the Milan stock exchange, Borsa Italiana, on July 11.

Sparta Launches New Financing Programs
Sparta Commercial Services, Inc. launched two new financing programs the company says will dramatically enhance its position and market share in the powersports industry.
The new programs, called TermsPlus and MatrixPlus, are revolving charge programs, with TermsPlus targeted to dealers and MatrixPlus to consumers.
TermsPlus offers dealers credit lines up to $250,000 that they can use to acquire new vehicles from manufacturers or distributors, as well as for parts, apparel and other desired inventory items.
“TermsPlus will be available to all powersports dealers, whether they’re franchises or independents, and irrespective of whether they sell motorcycles, ATVs, personal watercraft or snowmobiles,” said Sparta CEO Anthony Havens. “And, since TermsPlus is a revolving program, dealers can access as much of their credit line as they wish, as quickly as they like, and won’t have to repeatedly apply for new credit as they pay down their balances and have available credit.”
For consumers, MatrixPlus is positioned as an addition to Sparta’s Sport Loan, a traditional installment loan, and its Flex Lease, described by the company as the industry’s only motorcycle-leasing program.
“MatrixPlus will supplement our Sport Loan or Flex Lease, by giving customers a way to charge those items that our other programs don’t accommodate, like helmets, boots, and even service and repairs,” he said.

Pirelli Net Profit Slips 8.2 percent in First Half
Italy’s Pirelli & C. SpA said net profit for the first half of the year ended June 30 was Euro 193.1 million ($244 million), down 8.2 percent from Euro 210.4 million in the same six-month period of the prior year.
Company officials said the drop resulted from the loss of earnings from operations sold since the end of the first six months of 2005. Officials said the company’s first-half earnings were 8.7 percent higher than the Euro 177.6 million it would have recorded for first-half 2005 on the basis of a comparable company structure.
First-half net profit attributable to shareholders was Euro 153 million ($194 million), down 15 percent from Euro 179.6 million in the same period a year earlier.
Revenue for the first six months of the year was Euro 2.45 billion ($3 billion), up 7.5 percent from revenue of Euro 2.28 billion during the same period of 2005. Earnings totaled Euro 216.1 million ($274 million), up 6.7 percent from Euro 202.5 million during the comparable period of the prior year.
Although best known for its tire unit, Pirelli’s biggest asset is an indirectly held but controlling stake in Telecom Italia SpA.
Pirelli had planned to list a stake in its tire unit on the Milan stock exchange in the first half, but pulled the plan after weak investor interest. Still, the company went on to sell 39 percent of the business in August to a group of banks for Euro 740 million ($939 million), equal to the minimum amount it had been seeking in the planned initial public offering.

Arctic Cat names new board member
Arctic Cat announced the appointment of David Roberts to its board of directors.
Roberts currently serves as chairman, president and CEO of Graco, Inc., which provides fluid management systems and components. Roberts has held various manufacturing, engineering and management positions throughout his career. He also serves on the boards of Graco Inc., Franklin Electric Co. and the Dean’s Advisory Board of the Kelley School of Business, Indiana University.
He “brings tremendous global manufacturing expertise that will serve Arctic Cat’s shareholders well, as we seek to expand our presence in the powersports industry in North America and internationally,” said Christopher Twomey, Arctic Cat’s chairman and CEO.
Roberts’ appointment increases the number of Cat board members to nine.

Ducati Weathers Labor Protest
Workers at Ducati Motor protested earlier this month following the layoff of 100 employees at the manufacturer’s factory in Italy.
While the protesters managed to stop production for a whole day on Sept. 4, the unrest died down four days later, after workers’ union representatives and company executives met in an effort to find a solution to the matter.
The protesting workers vowed to block entrances to the factory from 7 a.m. to 1 p.m. daily until the requests of unionists were heard.
Federico Minoli, Ducati’s chairman and CEO, described the week as “truly intense.”
Minoli, writing in his Desmoblog, said the workers became redundant as a result of new production methods associated with the company’s upcoming models, which are to be introduced at EICMA.
“On Monday we endured a strike due to unemployment compensation provisions, and we weathered one week of intense talks in an effort to come to a fair compromise,” Minoli wrote.

KYMCO, Yamaha Awarded in Taiwan
The Industrial Development Bureau of Taiwan’s Ministry of Economic Affairs recently honored Kwang Yang Motor Co., Ltd. and Yamaha Motor Taiwan Co.
KYMCO was awarded as the top domestic motorcycle exporter in Taiwan while Yamaha Taiwan received an award as the leading exporter of original equipment manufacturer (OEM) complete-motorcycles to Yamaha Japan.
KYMCO was a winner for a sixth consecutive year. Yamaha Taiwan was a winner for a third consecutive year.
While both companies lead the market in Taiwan, they also both suffered export-value declines in 2005.
According to figures compiled by the Taiwan Transportation Vehicle Manufacturers’ Association, the export value for KYMCO, Taiwan’s largest manufacturer of two-wheelers, dropped to NT$9.66 billion ($295.4 million) in 2005 from about NT$10 billion ($305.8 million) in 2004.
Yamaha Taiwan, the major global production base of sub-150cc scooters for Yamaha Japan, exported $4.87 billion ($148.93 million) of Taiwan-made scooters to the Japanese parent company in 2005, down 15 percent from the previous year.
To duck the underselling competition from rivals in China, KYMCO said that it has turned its attention to exporting larger displacement scooters and ATVs. The company already has a 500cc scooter and ATV, and a 700cc scooter may be showcased at major international motorcycle shows later this year.

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