BOULOGNE-BILLANCOURT (dpa-AFX) – The French carmaker Renault is making progress on its austerity course and is now aiming for significantly higher profitability for the year as a whole. The operating profit should account for more than 5 percent of the proceeds, as the group announced on Friday in Boulogne-Billancourt near Paris. Previously, a return on sales of around 3 percent had been targeted. However, the abandonment of the hitherto important Russian business, announced in May, as a result of Russia’s invasion of neighboring Ukraine resulted in a loss in the billions. However, the stock rose higher than it had in months.
In the first half of the year, Renault sold around 12 percent fewer vehicles than a year earlier. At almost 21.1 billion euros, sales were roughly at the level of the previous year. Excluding the sharp devaluation of the Turkish lira and other exchange rate movements, revenue would have climbed 1.1 percent. The operating profit adjusted for special items was 988 million euros, more than twice as high as a year ago and thus accounted for 4.7 percent of the proceeds. The group’s activities in Russia are no longer included in the figures. Renault wrote off 2.3 billion euros on the business in the country. The bottom line is that the Renault shareholders made a loss of almost 1.4 billion euros.
The Renault share climbed in the top group of the French leading index CAC 40 by 5.7 percent to 28.90 euros. The paper was last so expensive at the end of February. Before the stock market slump as a result of Russia’s attack on Ukraine, the price was still above EUR 37.50 at times in February.
“Compared to expectations, Renault performed well in the first half of the year and delivered better than expected across the board,” wrote analyst Tom Narayan of Canadian bank RBC. The increased annual targets should also lead to rising consensus estimates on the stock market. Jefferies expert Philippe Houchois wrote that the surprisingly strong first half of the year put the company out of the proverbial emergency room and onto the path to recovery. During the Corona crisis, Renault was supported by the French state with billions. France has a 15 percent stake in the group.
Renault, like the entire manufacturing industry, is currently playing high prices in the cards because market demand is still high with production faltering. The French estimate that the lack of semiconductor supply will prevent the production of around 300,000 vehicles this year. More than 1.5 billion euros in free cash flow (operating free cash flow) should end up in the cash register from day-to-day business – so far Renault boss Luca de Meo had only assumed a positive value./men/mis/jha/
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