Recently, Michelin Tire announced strong profit growth in the first half of 2012, but sales of tires are expected to decline by 3% to 5% in 2012.
In the first half of 2012, Michelin’s net profit increased by 37% to 9.1 billion euros (about US$1.11 billion), compared with 667 million euros in the same period of 2011; operating profit increased by 36% year-on-year to 1.32 billion euros; sales increased by 5.9% year-on-year , to 10.7 billion euros, thanks to higher average prices offset the decline in sales.
In the first quarter of 2012, Michelin’s sales fell by 9.6%, and many retailers’ inventory was reduced to one of the reasons, but sales increased by 5.1% to 5.3 billion euros, benefiting from higher prices. In 2012, the price increase will offset the increased costs of Michelin. It is estimated that the company's 2012 costs will increase by 300 million euros to 350 million euros.
Michelin had previously stated that it is expected that sales in 2012 will be relatively stable, annual operating profit will increase significantly, and free cash flow will also be positive. However, Michelin's sale of its famous building on the Breteuil Avenue in Paris will have an impact on the company.
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