(BFM Bourse) – Renault gained more than 6% on the Paris Stock Exchange after raising its annual operating margin and free cash flow targets. The group announced higher margins in the first half, with the move upmarket of the diamond brand.
The Renault group published on Friday a net loss of 1.6 billion euros in the first half linked to the sale of its activities in Russia. Better margins on its sales did not indeed compensate for the charge of 2.3 billion linked to the sale of its industrial activities in Russia, where the group dominated the market with the Lada brand. Excluding Russia, net income from continuing operations was €657 million for the half-year.
On the Paris Stock Exchange, the title rose by 6.58% around 9:30 a.m., the value of the action reaching 29.15 euros. The automaker therefore recorded a net loss of 1.6 billion euros for the first half, compared to 368 million euros in net profit over the same period in 2021.
The group’s half-year turnover remained stable (+0.3%) at 21.1 billion euros, despite sales down 12% (excluding Russia), slowed by shortages of electronic chips.
Fewer discounts
The group improved its margins by selling more expensive and better equipped vehicles, with fewer discounts, posting 4.7% operating margin excluding Russia.
Renault has thus slightly raised its forecasts for the year 2022, aiming for an operating margin of 5%, in line with its long-term objectives.
In the second half, the group will have to fight against rising energy prices and also expects household confidence to “remain weak”. “But we will be able to defend our prices. We are not going to push sheet metal into our channels”, underlined Mr. De Meo.
The group has confirmed that the semiconductor crisis will have an estimated impact of 300,000 vehicles on its production for the year 2022. Electric and hybrid vehicles now represent 36% of group registrations, compared to 26% in the first half of 2021.
The rise in the price of raw materials also weighed in the accounts to the tune of 797 million euros, partially offset by savings on purchases to the tune of 167 million.
The group repaid one billion euros in advance of the loan guaranteed by the French state, paid at the start of the Covid-19 epidemic. It now intends to repay another billion in the second half of the year, and a final billion by the end of 2023 at the latest.
(With AFP)
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