Michelin profit rises despite sales slump
Compagnie Generale des Etablissements Michelin (ML.FR) said Monday that first-half net profit rose despite a slump in revenue over the period, which was characterized by heavy dealmaking by the French tire maker.
Michelin said net profit increased 6% to 917 million euros ($1.07 billion) in the six months ended June 30, from EUR863 million a year earlier. Revenue fell to EUR10.60 billion from EUR11.06 billion, partly due to negative currency effects stemming from the US dollar.
The results were broadly in line with expectations. Analysts had forecast Michelin to post net profit of EUR917 million and revenue of EUR10.62 billion, according to a consensus forecast provided by FactSet.
Michelin made several deals during the period. In January it agreed to combine its North American replacement-tires business in a joint venture with Japan’s Sumitomo Corp. SSUMY, -0.67% before buying U.K. polymer-based products manufacturer Fenner PLC (FENR.LN) for about $1.7 billion in March. Less than two weeks ago, it acquired Canada’s offroad-tire maker Camso for $1.45 billion.
Chief Executive Jean-Dominique Sennard said earlier this year that Michelin is pursuing acquisitions to support its ambitions for growth and value creation.
"Credit rating agencies have confirmed that the Group’s financial position remains robust after taking planned 2018 acquisitions into account," Michelin said.
The company confirmed its guidance for the full year.
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