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Michelin posts profit gain despite currency setbacks

Staff Writer |
Michelin posted higher profit for the first half as lower borrowing costs and U.S. tax helped offset exchange-rate setbacks.

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Net income rose 6.3 percent to 917 million euros ($1.1 billion) on revenues of 10.603 billion, down 4.1 percent, the company said.

Operating profit also fell 4.7 percent to 1.327 billion euros as a weaker U.S. dollar hurt revenues and wiped 218 million euros from January-June earnings.

Sales by volume rose 2.6 percent, with tyre sales to truck manufacturers rising 6 percent globally and car tyres advancing by 1 percent.

However, truck and car tyre revenues fell overall, while the highly profitable specialty tyre division saw net sales of its tractor, mining and aircraft tyres increase 4.3 percent to 2.214 billion euros, with an operating margin of 22 percent.

Lower financing and pension costs delivered a 36 million euro boost to Michelin’s bottom line, and United States tax reforms contributed another 105 million, Chief Financial Officer Marc Henry told reporters on a call.

Michelin reiterated its full-year guidance including sales volume growth in line with global tyre markets and an increase on recurring operating profit, combined with structural free cash flow of above 1.1 billion euros.

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