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Michelin targets profit growth helped by mining demand upturn
February 14, 2017 / 6:06 AM / 10 months ago

Michelin targets profit growth helped by mining demand upturn

PARIS, Feb 14 (Reuters) - Michelin said an upturn in mining sector demand for its outsize earthmover tyres will help to lift profits this year, as the French tyre maker posted a 4.5 percent increase in operating profit for 2016.

The company recorded 2.69 billion euros ($2.86 billion) in recurring operating income, lifting the full-year operating margin to 12.9 percent from 12.2 percent.

Revenue fell 1.4 percent to 20.91 billion euros on weaker pricing, despite a 2.1 percent increase in sales volumes. Net income jumped 43.5 percent to 1.68 billion euros.

For 2017, Michelin said it was targeting sales volume growth in line with global markets, an increase in recurring operating income before currency effects and free cash flow above 900 million euros.

Demand for high-margin earthmover tyres saw a third straight year of decline in 2016, Michelin said, although the company saw signs of improvement in that particular segment of the market.

“The trend turned upward in the fourth quarter, however, as mining companies resumed purchases,” the company said.

$1 = 0.9419 euros Reporting by Laurence Frost; Editing by Sudip Kar-Gupta

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