Michelin profit drops on low home tire demand

ERJ staff report (BC)

Clermont-Ferrand, France – Europe’s largest tiremaker, Michelin, reported a 13 percent decline in first-half profit as depressed automotive markets in its home region sapped demand, and earthmover tire sales dropped.

Operating profit excluding one-time items declined to €1.15 billion from €1.32 billion a year ago.

Sales decreased 5.1 percent to €10.2 billion.

Michelin hopes to grow revenues outside Europe by selling tires for mining equipment and other large vehicles amid a six-year slump in car sales in its home region.

Michelin kept to a target of keeping 2013 operating profit “stable” and holding global volumes “steady.” The company expects lower rubber prices to boost earnings in the second half as markets improve and sales volumes show “modest” growth. For the year, the group anticipates lower prices for raw materials adding €350m to operating profit.

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