Valeo says first-half net income surged 30 percent to 218 million euros

Article by Christian A., on July 28, 2011

The net income of French car parts maker Valeo in the first half of the year rose by 30% to 218 million euros ($316.7 million) as cost reductions along with higher sales outweighed an increase in raw material costs. From January to June 2011, sales had increased by 13% to 5.33 billion euros, boosted by original equipment demand.

Last week, Valeo said that U.S. antitrust authorities had informed the company to provide documents and information as part of an investigation by the Department of Justice.

Activist shareholder Pardus Capital Management, in a renewed effort, has been pressuring Valeo to revamp its strategy. Valeo reiterated its full-year outlook due to current market and commodity price conditions. Last May, Pardus urged Valeo to overhaul its strategy and stay cautious on acquisitions.

Pardus had previously been pressuring Valeo's management to streamline its operations. This battle ended with the departure of former Chief Executive Thierry Morin. At one point, the investor held a stake of nearly 20% in the company and secured a seat on the board.

According to Valeo's website, it held 2.86% as of the end of June, and no longer has the seat. Last March, Valeo announced new revenue and profitability targets as it anticipates that Asian expansion and new technology will help it to surpass the rate of automobile production in the next several years.

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