Valeo has posted a bigger than expected full-year net loss and a 9% sales drop, scrapped its 2008 dividend and said it did not see the car industry crisis ending before 2011.
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The group said it faced a “generalised collapse in its markets in the fourth quarter”, with sales falling 26.6% thanks to plunging car sales, Reuters reported.
Net loss for the fourth quarter fell to EUR313m (US$399.2m) as it booked a EUR241m charge for its plan to cut its workforce by 5,000, announced in December. It currently employs 51,200 people worldwide.
The group said in a statement it did not see the crisis ending before 2011 and in order to preserve the group’s liquidity it would not pay a 2008 dividend.
Valeo posted a full-year operating margin of EUR230m or 2.6% of total revenues, in line with revised targets it published in December. It had previously been aiming for a 3.6% operating margin.
Full-year sales fell 9% to EUR8.815m euros, just missing an estimate of EUR8.833bn based on nine analysts’ forecasts.
Valeo said a drastic savings and cash control plan adopted from the end of the third quarter as automobile production suddenly plunged, boosted its operating revenues by EUR140m.
Full-year net loss was worse than expected, at EUR207m, down from an EUR81m net profit last year, and missing a forecast of EUR127.35m based on six analysts’ forecasts.
The group said it had no debt reimbursement payments due before January 2011, and had confirmed credit lines totalling EUR1.2bn from major banks.
Rival French car parts maker Faurecia – part of PSA – earlier in the week posted a widening net loss and launched a EUR450m euros capital increase plan, Reuters noted.
