1.1MB - Pirelli

In 1998, Pirelli received the Investing in
Excellence award from British Telecom for
its progress in technology and services.
An agreement was signed with the University
of Southampton in the United Kingdom
for joint research on photonics.
produce, market and install telecommunications and power cables on both the domestic
and foreign markets.
As to the telecommunications cable sector, demand in 1998 was very strong in all
market segments.
With respect to Pirelli Cables Ltd., the domestic telecommunications sector recorded a
stable demand in 1998 and the affiliate maintained its market position, despite increasing
pressure from competition. The export markets, particularly those in the Far East,
weakened following the general economic trend of the region and, for 1999, these
conditions are expected to persist.
As far as power cables are concerned, there was a growth in the demand for high-voltage
cables and accessories. Important contracts were concluded in the U.K., Thailand,
Singapore and Lebanon. The demand for other cables destined for “Utilities” remained
stable.
As for the general market, in 1998, the affiliate strengthened its position on the domestic
market, while exports weakened as a result of the instability seen in the Far East.
In the field of installations, Pirelli Construction Co. operates on both the domestic and
foreign markets. Its specific activities are directed to the development and management of
a wide range of installation projects relating to power and telecommunications networks.
Sales, spread across 20 countries, rose compared to the previous year, despite the
persisting problems of the market, and were accompanied by a high level of profitability.
In the power cables segment, in Great Britain the contract was completed with Northern
Ireland Electricity to lay 110 kV XLPE cables, which led to the replacement of aerial cables
by underground cables.
Work also began at Manchester Airport to replace aerial lines with sections of
underground 400 kV lines using laminated polypropylene (PPL) cables which ensure high
performance. A similar installation was completed in Singapore.
British Telecom awarded Pirelli its award for the best supplier, within the framework of
the three-year contract stipulated last year.
As far as exports of telecommunications cables are concerned, the company acquired a
contract in Hungary.
At the end of 1998, the order portfolio of the affiliate was considerable, both in terms of
the domestic and export market.
Despite an increase in sales, the Spanish affiliate Pirelli Cables y Sistemas S.A. was
affected by the fall in prices.
The telecommunication cables segment showed a marked increase, especially connected
to the exports of OPGW cables; there was also a considerable increase in the sale of fiber
optic cables. The Spanish affiliate continues to be the main supplier of fiber optic cables
for Telefonica de España.
On the power cables market, the lower demand from Utilities was compensated by the
growth of the general market and exports. In 1999, once the electricity companies have
finished investing in the diversification and the privatization processes which constituted
their priorities in 1998, they are expected to return to their normal levels of activity.
In North America, for the second year running, Pirelli Cables and Systems LLc in the
United States and Pirelli Cables and Systems Inc. in Canada reached satisfactory
results.
The net financial position was also positive as a result of greater profitability and careful
management of working capital.
In North America, the telecommunications market continued its expansion, characterized
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