Although currency issues and sales declines in certain markets painted a gloomy picture over the results, Renault’s cost cutting and rising Dacia brand deliveries secured a great increase in the profit accounted for the first six months.
While overall sales were down 3% to 19.82 billion euros, the carmaker’s operational profit climbed to 729 million euros, taking the operating margin to 3.7 % of sales. Net income, which last year was hit by a one-time charge of 511 million euro on the company’s Iran business, now increased to 801 million euros from 97 million.
“We have seen a significant increase in group profitability,” said Chief Financial Officer Dominique Thormann. “The improvement to our margin stems from a very firm cost control. In the short term, the second half will bring a mixed bag of risks and opportunities,” he added. “The main risk identified for the rest of the year remains the downward trend and lack of visibility in our main emerging markets. We forecast a further decline in Brazil and Russia. We have very limited visibility on Turkey, Algeria, and above all, Argentina.”
The CFO also predicted that the overall European market would increase sales this year by 3 to 4%, even as the Russian region could decline by as much as 10%. During the first six months, worldwide sales increased 4.7% to 1.37 million cars and light commercial vehicles as Dacia’s European sales jumped 35%.
Via Reuters, Bloomberg