Renault has posted a net income loss of EUR1.4bn in the first half of 2022 (H1 2021: EUR0.4bn profit) as it took a big hit on exiting from its Russia business following Russia’s invasion of Ukraine.

Renault said the result of discontinued operations in Russia represents a loss of EUR2.3bn in 2022 H1, mainly due to the impairment of the property, plant and equipment, intangible assets and goodwill of AvtoVAZ and Renault Russia as well as the impairment of specific assets held by the other entities of the group and the result of disposals on the Russian entities sold.

In May, Renault sold its 67.7% stake in AvtoVAZ and all of its Renault Russia business to local Russian interests.

However, stripping that Russia item aside, Renault’s said its results pointed to an improvement in underlying profitability with revenues flat in the first half, despite the company selling 12% fewer vehicles in the period in a ‘disrupted market’. It said that a pricing effect was at work, though many analysts would point out that the whole industry is seeing higher prices in a supply constrained market.

In the first half, Renault Group operating margin was posted at EUR988m (4.7% of revenue): up EUR556m compared to 2021 H1.

Renault said the group order book in Europe stands at 4.1 months of sales, supported by the success of new launches such as the Renault Arkana (more than 100,000 orders since its launch, 60% of which are in E-TECH version and 60% on the retail channel).

Renault also said the Megane E-TECH Electric is ‘experiencing a promising launch with already more than 25,000 orders, 75% of which are on the highest versions and 80% on the most powerful engines’. The first vehicles arrived in French dealerships mid-May; its launch in European countries is underway and will continue until September.

Dacia Sandero remains the best-selling vehicle to retail customers in Europe.

Luca de Meo, CEO of Renault Group, said: “”Renault Group is resolutely pursuing its in-depth transformation and turnaround of its activities. These first half results are a proof of this: despite all the headwinds related to the stop of the activity in Russia, the semiconductor crisis and cost inflation, the group continues to improve its operating performance and is beginning to benefit from the success of new launches.

“Having more than compensated for the loss of its Russian activities and continuing its high-speed transformation, Renault Group is upgrading its 2022 full-year financial outlook. In the fall, new mid-term financial outlook and the accelerated roll-out of Renaulution will be presented during its Capital Market Day. All our energies are mobilized to transform Renault Group into a competitive, tech and sustainable player.”