PARIS (July 30, 2008) — Michelin reported declines in net and operating income on lower sales for the first half, despite a series of price increases.
The French tire maker said declined less than 1 percent to $13 billion although at constant exchange rates, revenues increased by 4.2 percent. Sales volume increased 2 percent, though this was driven mainly by Asian markets
Net income declined to $670.3 million and operating income to $1.12 billion as “external cost inflation”—raw materials and energy/transportation costs—eroded gains from improved pricing and higher volumes.
Michelin blamed the revenue decline on exchange rate variations during the period.
For the rest of 2008, Michelin anticipates global replacement tire demand to be down 1 percent from 2007, as established markets in Europe and North America decline by 3 and 2 percent respectively, more than offsetting rapid growth in the rest of the world.
In truck original equipment, however, Michelin sees global growth of 11 percent, despite a decline of 9 percent in North America. This market will grow by 30 percent in China; 18 percent in South America and 9 percent in Europe, according to Michelin.