Renault posted a 23-percent decline in earnings before interest, taxes and one-time items to EUR482 million ($592 million) in the first half of 2012 from EUR630 million in the same period in 2011. The company’s sales slightly dropped 0.8 percent to EUR20.9 billion. Renault's automotive unit, meanwhile, recorded a 35-percent dive in first-half profit to EUR87 million, as it consumed EUR200 million of cash. This translates to only 0.4 percent in profit margin in the first half of 2012, compared with a 1.1 percent in the same period in 2011. Despite the decline, analysts commended Renault for its first-half results, given the dwindling demand for vehicles in Europe.
Analyst David Arnold of Credit Suisse said that it is very encouraging to see that the company managed to post a profit in the autos division during the tough six-month period. Arnold, however, said that there is a little chance that Renault "can make up the delta" between its first-half results and a full-year goal of positive operating cash flow. Sascha Gommel, an analyst at Commerzbank, described Renault’s first half performance as “good results,” while comparing it to Peugeot. Local rival PSA/Peugeot-Citroen posted a first-half loss of EUR662 million at its auto division. Gommel quipped that Porsche’s still profitable automotive division should be perceived positively by the market.
Renault aims to beat its deliveries in 2011, while abandoning an earlier growth target of 3 percent to 4 percent. The French carmaker now expects the European market to shrink 6 percent to 7 percent in 2012, and the French market to fall by 10 percent to 11 percent. According to the industry association ACEA, Renault posted a 17-percent decline in deliveries to 583,145 vehicles, logging the biggest first-half sales drop in Europe.
