(Reuters) – French tyre maker Michelin on Tuesday posted half-year sales up 18.7%, in line with analysts’ consensus estimate, but the suspension of its operations in Russia hit net profit.
The first Western tyre maker to enter Russia in 2004, Michelin decided to hand over its activities there to a new entity under local management by the end of the year, after it said it became impossible to resume output amid growing supply chain problems resulting from Russia’s invasion of Ukraine.
The company, which makes tyres used in cars, aircraft, bicycles and industrial equipment, saw its sales increase to 13.29 billion euros ($13.46 billion) in the six months to June.
Net profit, which dropped to 843 million euros from 1.03 billion euros a year earlier, included an impairment loss of 202 million euros related to the suspension of Russian activities, the group said in a statement.
Analysts polled by the company had predicted the figures to come in at 13.30 billion and 1.07 billion euros, respectively.
The group maintained its full-year guidance for segment operating income above 3.2 billion euros at constant exchange rates and structural free cash flow above 1.2 billion euros.
“The uncertainties of today’s world make it difficult to formulate a medium-term outlook,” said chief executive Florent Menegaux in a statement.
The group also warned supply chain disruptions and galloping inflation continued to dampen the outlook for tyre market growth.
The performance of the passenger car and light truck markets is expected in a range of down 2% to up 2%, while the truck market is seen growing 2-6%, Michelin said.
($1 = 0.9871 euros)
(Reporting by Dagmarah Mackos and Augustin Turpin; Editing by Mark Potter)
