PARIS, July 29 (Reuters) - Europe's biggest tyre maker Michelin posted a fall in first-half net profit due to restructuring costs on Tuesday but said operating profit improved thanks to stronger demand and higher prices.
Michelin also said it would take a 300 million euro charge in the second half following its recent acquisition of Danish tyre distributor Viborg, which would "weigh in a significant manner on 2003 net income".
Michelin said in a statement net profit fell to 157.5 million euros from 229.4 million in the year-ago period due to a 178.6 million euro one-off charge linked to restructuring at its Spanish unit where it is laying off some 1,300 workers by 2005.
Net before minorities fell to 165.5 million euros from 254 million.
But operating profit climbed to a forecast-beating 578.3 million euros from 569.6 million on sales down six percent to 7.348 billion euros.
This was good for an operating margin of 7.9 percent percent, compared with 7.3 percent in the first half of 2002.
The firm said gave no firm forecasts for the full-year but reiterated it expected stable tyre markets with a risk of decline and said it aimed to continue to improve its performance even though raw material prices in the second half would remain as high as in the first half.
Eight analysts polled by Reuters forecast an average net profit of 182 million euros, and operating profit of 531 million. Michelin published its own poll of 14 analysts showing average net profit before minorities of 168 million, with an operating margin of 7.1 percent of sales at 7.355 billion euros.