HANOVER, Germany (Reuters) - Tires and parts maker Continental AG, newly promoted to Germany's benchmark DAX index, said on Wednesday it was considering making further acquisitions in the medium term.
"If there was an opportunity to buy the right business at the right price, we now have the financial ability to do that," Continental Chief Executive Manfred Wennemer told reporters, citing the company's progress in cutting its debt.
Continental has managed to ride out the malaise in the global auto industry by shutting tire factories and focusing on expanding its electronic components business.
This strategy has paid off at a time when German carmakers are launching more new models than ever, many of them with the electronic braking, steering and suspension systems that Continental produces.
The company posted a 15-percent increase in first-half operating profit last month and said it was expecting to generate full year operating profit of more than 700 million euros ($778 million).
Net debt fell by 625 million euros in the first six months of the year, cutting Continental's gearing, or debt-to-equity ratio, to 113 percent from 155, and putting it on track to hit its year-end target of having less debt than shareholder equity.
Its stock, which has outperformed the DJ Stoxx European autos index since the start of the year, climbed 3 percent to a four-year high of 23.2 euros at the open on news of its return to the DAX.
Wennemer said Continental was not about to make another acquisition but would keep its eyes open, particularly in the tire business.
German stock exchange operator Deutsche Boerse said late on Tuesday it was adding the Hanover-based company to the DAX, replacing financial services firm MLP. The index changes take effect on Sept. 22.