Renault hikes first-half operating profit by 25% to 729 million euros

Article by Christian A., on July 31, 2014

Renault posted a 25-percent surge in earnings before interest, taxes and one-time items in the first half of 2014 to EUR729 million ($979 million) as cost-cutting measures offset currency headwinds and increasing inventories. The carmaker saw a large jump in net income for the first six months of 2014 to EUR801 million from just EUR97 million in the same period in 2013.

Last year’s first-half result was hurt by a EUR511 million write-down on its Iran business. Renault also saw its automotive operating profit jump from EUR211 in the first half of 2013 to EUR348 million in the same period this year.

Renault likewise managed to hike its operating margin from 2.9 percent to 3.7 percent of revenue. Revenues’ however, dropped 3 percent to EUR19.82 billion, no thanks to currency effects.

Automotive generated EUR18.7 million of revenue, reflecting a 3-percent drop. Renault said that despite an increase in registrations, the volume effect was negative due to an adjustment in inventories of independent dealers.

The French carmaker reiterated its full-year target of higher operating profit as supported by higher sales and vehicle deliveries. According to Renault, the recovery of the auto market in Europe was stronger than 2 percent to 3 percent it had forecast. It is now expecting the Europe auto market to grow.

Chief Financial Officer Dominique Thormann remarked that the significant increase in group profitability stems from a “very firm cost control."

The carmaker particularly saved around EUR412 million in cost, including EUR200 million gains from cuts in purchasing and EUR190 million from logistics, research and development.

Renault is aiming to reach a goal of a 5-percent profit margin by 2016 by cutting thousands of jobs, mostly in its home country France. In 2013, Renault trimmed its local workforce by nearly 5,600 jobs, slashing the figure to 48,550 workers as of Dec. 31, 2014.

Topics: renault, profit

If you liked the article, share on:

Comments

Recommended

A few months ago, Mercedes-Benz promised that they will be treating everyone to a “big surprise” during the Monterey Car Week. And true enough, many of us were stunned as...
by - August 19, 2017
McLaren has already shown some interest in electrifying their models. And initially, we thought that they will just use hybrid systems to use across their current lineup. Nevertheless, we have...
by - August 19, 2017
Fifty years after its glorious victory at the 24 Hours of Le Mans, Ford launches the 2018 Ford GT ’67 Heritage Edition at the 2017 Monterey Car Week. The red...
by - August 18, 2017
Hyundai has recently unveiled an unnamed pre-production model of its new fuel cell SUV. We don’t know what to call this model just yet, but sources say that this model...
by - August 18, 2017
This weekend at the 2017 Pebble Beach Concours d’Elegance, the BMW Z4 Concept will make its first public appearance. The good news is that we will finally have a real...
by - August 18, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries