Page last updated at 13:21 GMT, Friday, 12 February 2010

Michelin profits hit by falling sales

Michelin boss Michel Rollier
Michelin boss Michel Rollier says the company cannot give a profit forecast

French tyre manufacturer Michelin has reported a sharp slump in full-year profits for 2009 as sales fell during the global downturn.

Net profit was 106m euros ($144m; £92m), compared with 360m euros for 2008. Sales fell 9.8% to 14.8bn euros.

The company also warned about rising rubber prices and said it could not give a profit forecast for 2010 due to uncertainty in the tyre market.

Michelin shares fell almost 3% in Paris as a result.

Despite the disappointing full-year results, the company said that sales had picked up in the second half of 2009, largely on the back of car scrappage schemes introduced by governments across the world to boost demand for cars.

However, with the majority of these schemes now ended, tyre sales could now suffer, analysts said.

"The market visibility prevailing in early 2010 and the rising cost of raw materials are prompting us to exercise extreme vigilance," said Michelin's managing partner Michel Rollier.

"I such an uncertain environment and with the lack of visibility we have, it is not possible for us to predict a trend for operating results."

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