Renault posted a 15-percent jump in earnings before interest, taxes and one-time items (operating margin) in the first half of 2013 to EUR583 million ($774 million), compared to EUR508 million in the same period in 2012. The French carmaker, however, suffered an operating loss of EUR249 million in the first half of 2013, no thanks to one-time costs of EUR832 million, including a provision of EUR512 million for its business in Iran.
Renault posted an operating profit of EUR545 million in the first six months of 2012. The carmaker’s bottom line was weakened by lost business in Iran as well as the bankruptcy of electric car infrastructure company Better Place.
Renault’s first-half net income (group share) fell to EUR39 million from EUR734 million in the first six months of 2012. Renault’s automotive division logged a 0.9-percent decline in revenues to EUR20.4 billion, mainly due to a negative currency effect and a drop in registrations.
The carmaker said that the drop in registrations was reduced by the surge in independent dealer inventories.
The carmaker’s auto division's operating margin soared to 2.9 percent from 2.5 percent. Renault chief executive Carlos Ghosn reiterated the carmaker’s full-year 2013 goals, including a positive auto division operating margin and cash flow.
He said in a statement Renault is on track to achieve its objectives for 2013. Philip Watkins, a London-based Citi analyst, attributed Renault’s "surprisingly strong results” to tight discipline on pricing and costs.
The French carmaker is shielded from the current economic crisis in Europe thanks to its 43.4-percent stake in Nissan; its growth at its low-cost Dacia brand; and a timely push into emerging markets.