Renault report massive half year loss
Renault has reported a first-half net loss of 2.71 billion euros ($3.8 billion) as the recession caused deliveries to drop and buyers to chose less-profitable models, this compared with a profit of 1.58 billion euros a year earlier.
Renault joined other European carmakers in pausing manufacturing late last year as the car makers struggled to reverse a buildup of unsold vehicles. Europe’s car market contracted 11 percent in the first half with a 14-month decline halted in June because of government-backed sales incentives.
Revenue fell 24 percent to 16 billion euros, outpacing a 17 percent decline in deliveries to 1.11 million cars and light commercial vehicles. Renault reported 326 million euros in charges in the period, including a 297 million-euro impairment cost for two unidentified models that are likely to miss sales targets because of the recession.
The company slashed inventory by 16 percent to 4.4 billion euros in the first half, helping generate 848 million euros toward a goal of achieving positive full-year cash flow.
“We’ve taken a head start on our cash-flow objectives,” Chief Financial Officer Thierry Moulonguet said at a news briefing near Renault headquarters. Generating further cash “will depend on market conditions” for the rest of 2009.
Nissan, Renault’s 44 percent-owned alliance partner, rose 10 percent in Tokyo to a nine-month high after posting a narrower-than-expected quarterly loss. Nissan also owns a 15 percent stake in the French carmaker.
Renault said in February that achieving positive cash flow was its “single priority” for 2009 as the carmaker announced a 982 million-euro second-half net loss. The company promised at the time to rein in wages, reduce inventories, halt development of three new models and delay projects in India and Morocco to reduce capital investment by 20 percent.
Source: Bloomberg
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