Paris: French tire maker Michelin on Friday posted a net loss of $122 million ($172 million) in the first half as car- and truckmakers slashed production and as the company incurred costs for restructuring.
The quarterly loss compared to net profit of euro430 million a year earlier. Revenues fell 13.4% to euro7.13 billion.
Chief executive officer Michel Rollier said Michelin has introduced short-time working hours in several countries to deal with the downturn in sales. He said inventories have returned to “more normal levels” but “not to the extent that we can talk about a real upturn.”
Like auto makers Renault SA and PSA Peugeot Citroen, Michelin, which is based in Clermont-Ferrand, France, aims to generate positive free cash flow at the year end to help it ride out the crisis.
In the first half Michelin generated euro575 million in free cash flow, compared with a negative euro445 million a year earlier after a euro580 million reduction in inventory.
Michelin said markets for car and light truck tires showed signs of stabilizing in the second quarter, particularly in countries where governments introduced “cash-for-clunkers” schemes.
But the collapse in demand for truck tires that began in the autumn in Europe and North America has spread to all markets “and shows no sign of abating,” the company said.