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Michelin profit supported by cost-cutting, raw materials decline

Michelin recorded a 9 percent gain in first-half profit, the French tire maker said on Tuesday, as cost-cutting and lower raw material costs more than made up for lower revenue.

Net income rose to 773 million euros ($850 million) in January-June, the company said, even as sales declined 2 percent to 10.29 billion. Recurring operating income rose 11 percent to 1.41 billion euros, lifting the operating margin to 13.7 percent from 12 percent.

Michelin reiterated full-year goals including an increase in sales volume, up 2.5 percent in the first half, and higher operating income underpinned by free cash flow in excess of 800 million euros.

European and North American truck and car tire markets are expected to "lose some momentum" in the rest of the year, the company added, while Chinese demand remains buoyant.

Supergenijalac | Getty Images

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