Renault reported better than expected profit, as it managed to eliminate debt for the first time since its alliance with Nissan.
Renault said that its automotive unit net cash reached 1.49 billion euro ($2 billion) at the end of 2012, compared with a 299 million euro net debt in 2011. Earnings before taxes and interest were 729 million euro, surpassing the analysts’ estimates of 698 million euro. In 2012 Renault lost market share in Europe, as it focused to expand in Russia and Latin America.
In its home region, Renault saw a drop of 19%, the lowest level in Europe, surpassing the 7.8% drop of the regional industry. The automaker said it plans to take a larger share of the auto market this year by investing in its model lineup.
“These are good results,” Jose Asumendi, an analyst at JPMorgan Chase & Co. with a neutral recommendation on the shares, said by phone. “The outlook of positive operational free cash flow and positive operating margin is reassuring for the investors.”
Renault expects sales to increase this year, relying on its budget Dacia Logan and the revamped Clio subcompact. The automaker is set to reach positive earnings even if the European market is expected to contract by 3%.