Euro strength deflates Michelin's profits

Tyre manufacturer Michelin has reported a 45.3% fall in full-year profits.

The French company blamed the strength of the euro, a surge in raw material costs and a one-off charge relating to the acquisition of loss-making Danish retailer Viborg, on the figures.

Operating profit fell 6.7% to €1.14bn on sales down 1.8% to €15.4bn from €15.6bn a year earlier.

Its operating margin - a key measure of profitability - stood at 7.4% for the full year, (7.7% excluding Viborg) against 7.8 per cent in 2002.

Net debt at the end of 2003 fell by €378m to €3.4bn.

Shares in Michelin fell 2% to €38.96 in early morning trading in Paris.