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MILAN, Dec 16 (Reuters) - Pirelli , emerging from a round of factory closures and job cuts, expects profitability at its industrial arm to recover to 2001 levels this year and to grow again in 2004, a top executive said on Tuesday.
Managing Director Giovanni Ferrario told Reuters that despite probably flat markets for power and telecoms cables in 2004, the group's operating profit margin would show a "good increase" next year, having topped four percent this year.
In 2002, the margin slumped to 1.9 percent, hit by a downturn in demand for cables from telecoms and power providers.
"We are out of the tunnel. Now we are seeing opportunities for growth and our capacity to rebound is very strong," Ferrario said in an interview.
One bright spot next year could come from power utilities, which could start buying cables again from the second half of 2004, he said.
Pirelli's cost-cutting push had created savings of 350 million euros ($432 million) over the last two years, the executive said.
"The biggest part of it has been done but we're not thinking of stopping," Ferrario said, adding that output of low-margin products would be increasingly transferred to countries with cheaper labour costs.