Today, July 24th, French auto parts maker Faurecia reported 119 million euro ($98 million) negative cash flow in the first six months of 2012 due to more than a half increase in capital spending.
The company revised its 2012 targets for operating profit and revenue, announcing that its results will see a continuous decrease due to the falling European auto production for the second half of 2012. For the first six months of this year Faurecia reported a 7.5% increase in revenue to EUR8.77 billion, but its operating profit dropped 11% to EUR303 million and the net profit fell 35% to EUR185.8 million.
This means more bad news for parent company PSA Peugeot Citroen, which already announced a restructuring program that will lead to 8,000 job cuts and the closure of one of its facilities in France. Peugeot currently owns 57.4% of Faurecia and it will release its first-half results July 25th. Faurecia now expects this year to end with operating income of between EUR560 million and EUR610 million, down from its previous target of EUR610 million and EUR670 million.