Renault SA’s profit jumped 44 percent last year as the French automaker gained market share in Europe on the back of new models, including the Kadjar sport utility vehicle (SUV).
Operating profit climbed to 2.32 billion euros (US$2.62 billion) from 1.61 billion euros the previous year, Europe’s third-largest automaker said in a statement yesterday. That beat the 2.02 billion euros average of eight analyst estimates compiled by Bloomberg.
Renault forecast higher sales and an improved operating margin this year, with European car demand projected to increase by 2 percent.
Photo: AFP
Renault chief executive Carlos Ghosn is pushing the French manufacturer to lift margins to balance out its alliance with more profitable partner Nissan Motor Co. To this end, Renault is rolling out more SUVs like the Kadjar and plans to revive the Alpine sports car.
The profitability push has been hampered by expansion into Russia and other emerging markets such as Brazil, where slumping economies have sapped demand.
Renault reached its operating margin target of 5 percent “sooner than planned,” Ghosn said in a statement.
“We must now achieve our revenue target while maintaining a margin in excess” of that level, he said.
Sales rose 10 percent to 45.3 billion euros last year. Renault’s profit margin rose to 5.1 percent from 3.9 percent in 2014.
Nissan reported a 6.6 percent return on sales in the nine months through December last year.
Renault raised its dividend proposal to 2.40 euros per share from 1.90 euros the previous year.
Renault wrote down the value of its holding in AvtoVAZ, the leader in the Russian car market, by 225 million euros to 91 million euros. Renault said it’s in talks with other shareholders to recapitalize AvtoVAZ, which could lead to it being consolidated in Renault’s accounts.
The French automaker forecast industry-wide demand in Russia would decline an additional 12 percent this year.
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