Michelin on Friday reported a 29% drop in first-half net profit due to restructuring charges and sharply higher raw materials costs.
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Michelin said net profit fell 29% to EUR276m ($348m), from EUR389m a year ago, Dow Jones Newswires reported. Net revenue rose 7.1% to EUR8.023bn, due to higher selling prices and a positive exchange rate impact.
The figure was below analyst expectations for a profit of EUR314m, according to a company-compiled forecast of 12 analysts.
Dow Jones said the tyre maker warned that costs would continue to be a problem in the second half of the year, resulting in a full-year operating margin of around 8%, compared to the consensus forecast of 8.5%.
Jean-Dominique Senard, chief financial officer, reportedly said the company still expects to achieve its target of a 10% margin in 2010.
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By GlobalDataThe company said it booked a EUR160m restructuring charge related to the closure of a Canadian BFGoodrich plant, the report noted.
Raw materials costs rose 21%, representing an additional cost of EUR352m, Michelin told the news agency. Rising energy and transportation costs added another EUR62m, it added.
Operating margin across the whole company fell 1.2 percentage points to 8.0%, Dow Jones said.
