FRANCE: Renault H1 operating profit on target
Renault has posted an operating profit of EUR592m (2.7% of revenues) for first-half 2006, confirming its forecast of 2.5% for full year 2006, despite negative factors such as higher energy costs and higher raw material costs.
It is forecasting 3.0% for 2007, 4.5% for 2008 and 6% for 2009.
H1 group sales fell 3.2% year on year to 1,315,351 units.
In Europe, sales fell 7.6% to 951,339 vehicles reflectin the 2005 decision to reduce low-profit fleet sales.
Outside Europe sales rose 10.5% to 364,012 units. Sales outside Europe accounted for 28% of the worldwide total, up 4 percentage points on last year.
Revenues of EUR21,547m were up 0.4% on H1 2005. Automobile division revenues rose 0.2% to EUR20,560m.
Renault said the decline in Europe sales was offset by growth outside Europe, the start of SM3 exports by Renault Samsung Motors for Nissan, a "slightly positive currency effect (mainly in South Korea and Mercosur) and sales of spare parts, power trains and built-up vehicles to partners.
Finance subsidiary RCI Banque contributed EUR987m to revenues, up 3.9%, due to growth in insurance services and average loans outstanding.
Net income was EUR1,627m in first-half 2006, compared with EUR2,170m a year previously. Earnings per share were EUR6.34, compared with EUR8.52.
"In 2007, Renault will start its product offensive with eight new products launched in the second half of the year. Given this product rollout schedule, earnings will mainly be driven by the cost-reduction program accelerated under Renault Commitment 2009 in all company functions," the automaker said in a statement.
"In 2008 and 2009, earnings growth will gather momentum, driven by the reinforcement and expansion of the range (seven models in 2008 and nine models in 2009), as well as by our continued international development.
Based on this outlook, our foreseen milestones for Renault's operating margin are 3.0% for 2007, 4.5% for 2008 and our commitment of 6% in 2009."