Michelin (PA: MICP), the French manufacturer of tires, reported a 9 % rise in half-year profits, helped by measures to reduce costs and reduce the cost of raw materials, which made possible to compensate for falling revenues.
Net income rose to 773 million euro ($ 850 million), despite the fact that the sales fell 2 % to 10.3 billion euro. Income from continuing operations rose 11 % to 1.41 billion euro, resulting in an increase in operating margin to 13.7 % from 12 %.
Michelin, based in Clermont-Ferrand in the south central part of France, said on Tuesday that demand for tires for cars and trucks is likely to slow in the US and Europe, while demand for tires in China will remain high.
The results for the first half of the financial year exceeded the expectations of analysts polled by Reuters, who expected a net profit of 739 million euro and an operating profit of 1.32 billion euro, for large sales of 10.44 billion euro.
Despite the 2.5-% growth in sales volume, the revenue has suffered as a result of unfavorable changes in foreign exchange rates.
However, depreciating raw materials, mainly natural and synthetic rubber, brought the company an additional income of 339 million euro.
Michelin has confirmed its forecast for the current year, expecting to increase sales and operating profit due to the free cash flow in excess of 800 million euro.
As for the French stock market, it closed Tuesday trading higher due to the strengthening of the raw materials, industry and oil and gas sectors.
At the close of the Paris stock exchange, CAC 40 rose 0.15%, reaching a monthly high, and SBF 120 index rose 0.16%.
At the Paris stock exchange, the number of advancing securities (369) exceeded the number closed in the red (281), and the quotes of 109 shares remained virtually unchanged.
Meanwhile, in the Forex market, EUR/USD rose 0.03% to 1.0988, and EUR/GBP fell 0.05%, reaching 0.8367.
The USD index dropped by 0.11% to 97.17.