Renault SA yesterday posted its biggest full-year loss on record as restrictions to contain the spread of COVID-19 wrecked auto sales in its key market Europe.
The French manufacturer reported a net loss of 8 billion euros (US$9.7 billion) for last year, worse than the 7.85 billion euros deficit forecast by analysts. Much of the damage was done during the first half, when lockdowns crippled auto shipments.
This year “is set to be difficult given the unknowns regarding the health crisis, as well as electronic components supply shortages,” CEO Luca de Meo said in a statement. “The priority is profitability and cash generation.”
Still, Renault said that business improved significantly during the final six months of last year, when it generated an operating margin of 3.5 percent and positive automotive operational free cash flow.
De Meo took over in July last year after his predecessor was ousted as part of the fallout from the arrest of former CEO Carlos Ghosn. He is pushing through plans aimed at shoring up profits, repairing the troubled partnership with Nissan Motor Co, and cutting costs by closing sites and eliminating 14,600 jobs.
Renault’s result was weighed down mainly by Nissan, which accounted for nearly 5 billion euros of that amount, most of it accumulated during the first half. The automaking alliance, which also includes Mitsubishi Motors Corp, has been shaken to the core and rests on the companies turning their fortunes around.
De Meo faces the difficult task of rationalizing a bloated cost structure and excess production capacity, while pacifying the French state — Renault’s most powerful shareholder — on local jobs.
Last month, the CEO unveiled a turnaround plan targeting an operating margin of more than 3 percent by 2023 and at least 5 percent by mid-decade. Analysts have said the push lacks ambition considering the 4.8 percent return in 2019, before the pandemic hit.
Renault has already achieved 60 percent of the planned 2 billion euros in cost-cutting, it said yesterday.
While the company did not give an outlook, it warned that a global glut in auto chips could cut its production by 100,000 vehicles this year, with the shortage reaching its peak in the second quarter.
Renault’s sales dropped by more than one-fifth last year to 2.95 million vehicles — a far cry from Ghosn’s goal for more than 5 million annually by the end of next year. Renault executives have since pledged to chase profitability over sales volumes.
Global auto shipments are expected to recover this year, but challenges remain.
While Volkswagen and BMW AG posted better-than-expected preliminary earnings driven largely by China’s recovery, sales in Europe — the key market for Renault — slumped to a record low for last month as lockdowns again shook the continent’s biggest markets.
The rise of the cryptocurrency dogecoin has reached a new level after the token was used to pay for a lunar satellite launch. SpaceX, Elon Musk’s commercial rocket firm, is to embark on a moon voyage next year carrying a so-called cubesat — a mini-satellite used for space research — from Geometric Energy Corp that has been paid for entirely in dogecoin. The development is the latest twist in the saga over the digital token, which started as a joke in 2013, but is now a dominating Internet meme and sitting on a 21,000 percent rally in the past year. Musk has
The Financial Supervisory Commission (FSC) yesterday fined Citibank Taiwan Ltd (花旗台灣) NT$10 million (US$357,194) and DBS Bank Taiwan (星展台灣) NT$6 million for breaches of the nation’s anti-money laundering (AML) regulations. The NT$10 million fine is the highest penalty that it has imposed on a domestic bank, the commission said. Citibank Taiwan failed to set up a sound mechanism for evaluating clients’ risk of money laundering and for detecting suspicious transactions, Banking Bureau Deputy Director-General Huang Kuang-hsi (黃光熙) told a news conference in New Taipei City. The bank based its AML policies on those of its US-based parent company, Citigroup Inc, but the policies
CAPACITY EXPANSION: Construction of the site, which is to be the firm’s first mRNA production facility outside of Europe, is to begin this year and likely finish in 2023 COVID-19 vaccine maker BioNTech SE yesterday said it would build a Southeast Asia headquarters and manufacturing site in Singapore to produce hundreds of millions of messenger RNA (mRNA)-based vaccines per year. Construction of the site would start this year, and it could become operational by 2023, the German company said in a statement. “With this planned mRNA production facility, we will increase our overall network capacity, and expand our ability to manufacture and deliver our mRNA vaccines and therapies to people around the world,” BioNTech chief executive Ugur Sahin said. The vaccine produced by BioNTech jointly with Pfizer Inc of
OUTBREAK: About 200 of the airline’s 1,200 pilots are not able to work. Most of them have been quarantined to prevent further infection, but 12 have COVID-19 China Airlines Ltd (CAL,中華航空) yesterday confirmed that it would temporarily reduce its cargo flight services to cope with a pilot shortage, as one-sixth of its pilots have been sidelined by a COVID-19 outbreak. “We are working out a new schedule,” the airline said in a statement after local news media reports on Saturday said that it would be reducing its cargo services from Wednesday, primarily affecting US destinations. CAL declined to give details about its new operating plan, but the reports said that it would be suspending its cargo flights to Dallas Fort Worth International Airport, Hartsfield-Jackson Atlanta International Airport and