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Michelin profits rise, but caution remains

Feb 12 2013 12:43 AFP

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Paris - French tyre-making giant Michelin reported on Tuesday a 7.4% rise in net profit in 2012 with a boost from capital gains but was cautious about this year while holding medium-term targets.

The group reported a rise in net profit from the 2011 level to €1.6bn ($2.14bn) and said that operating profit before non-recurrent items surged by 25.0% to €2.4bn.

But the price of shares in the company fell by 3.73% in early trading to €69.99, marking the biggest fall on the CAC 40 index which was down overall by 0.23%.

In the last 12 months, the share has risen by about 30.0%.

At Global Equities, trader Xavier de Villepion commented that "this good news is behind us and has been factored in by the market for a long time."

He said that the outlook for this year looked far more uncertain, and this was a concern to investors.

The group said that the outcome for 2012 reflected effective pricing, the strength of a global presence and a limited impact from the price of raw materials.

Sales rose by 3.6% to €21.5bn but the volume of business fell by 6.4% because demand remained sluggish in the second half of the year, Michelin said.

The group said it expected to pay a dividend of €2.40 per share for 2012.

The company was cautious about the outlook for this year. It said it was aiming for stable sales volumes, a stable operating profit before non-recurrent items and at current exchange rates, and positive cash flow.

The group stood by its outlook for 2015 of an operating profit of €2.9bn.

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