Renault reported first half net income up 52% year on year to EUR1,253m on record sales of 1.4m units, up 1.9%, and group revenue up 7.3% to EUR21,101m.

Group operating margin was EUR630m, or 3.0% of revenues (versus EUR780m or 4.0% in H1 2010).

The negative impact of the tsunami in Japan on group operating margin in the first half was estimated at EUR150m.

Group operating income rose EUR54m to EUR772m.

Automotive net debt was down EUR214m to EUR1,221m at the end of June.

Chairman and CEO Carlos Ghosn said: “The financial results were impacted by external events, including supply constraints, which will subside in the second half, and a considerable increase in the cost of raw materials.”

Automotive contributed EUR20,143m to revenues, the 7.3% rise due largely to higher priced models and increased volume.

Renault said French market share was hit in the first quarter by a shortage of vehicles and worsened, in the second quarter, by parts supply issues following the 11 March earthquake/tsunami in Japan.

Automotive operating margin was EUR221m, or 1.1% of revenues, down EUR189m year on year due to higher raw materials cost, negative currency effect of EUR102m, growth in sales volumes totalling EUR59m and “a mix/price distortion of -EUR91m in a competitive European market that was disrupted by supply constraints”.

Renault booked a net gain of EUR557m from the contribution of associated companies, including Nissan, AB Volvo and AvtoVAZ.


Renault said the global market for passenger cars and light commercials was expected to continue to grow, ending the year up 3% to 4% versus 2010.

“Emerging markets will remain the main growth drivers, while Europe should remain stable or even contract slightly (-2%) for the year as a whole, with a 4% to 6% decrease in the French market. In this context, Renault expects to post higher sales volumes and revenues than in 2010,” it said.

“Supply constraints are expected to subside gradually in the second half, enabling a strong recovery in production from September. The impact of the Japanese tsunami on operating margin in the second half is estimated to be an additional EUR50m.”

“Renault’s first-half 2011 results were better than street expectations,” JPMorgan analyst Ranjit Unnithan said in a research note cited by Reuters. “The reconfirmed outlook is likely better than feared, especially given that PSA guided down its auto outlook yesterday.”

Chief operating officer Carlos Tavares told analysts the group predicted a EUR600m impact on automobile operating profit in 2011 from the rise in raw material costs, EUR150m more than expected, Reuters reported.