'%20id='ico-down'%20stroke='%23000000'%20stroke-width='1.5'%3e%3cg%20transform='translate(1092.250000,%20254.750000)'%3e%3cpolyline%20id='Path-2-Copy-4'%20transform='translate(5.500000,%202.750000)%20scale(1,%20-1)%20rotate(-180.000000)%20translate(-5.500000,%20-2.750000)%20'%20points='0%200%205.5%205.5%2011%200'%3e%3c/polyline%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e){kind=small}
French carmaker Renault said Friday that it steered back to profit in the six months of the current year as its restructuring programme bore fruit more quickly than expected.
Renault said in a statement that it booked a net profit of 368 million euros ($437 million) in the period from January to June, compared with a bottom-line loss of 7.3 billion euros a year earlier.
Underlying or operating earnings showed a first-half profit of 571 million euros compared with a loss 2.0 billion euros the year before, bringing the operating margin to 2.8 percent.
Revenues in the January-June period grew by 27 percent to 23.4 billion euros.
“These results are the fruits of our strategic ‘Renaulution’ plan, focused on profitability,” said chief executive Luca De Meo.
“They mark only the first step in our turnaround, which should accelerate with the arrival of the new vehicles in preparation.”
Looking ahead to the full year, Renault said that “despite the uncertainties in demand, the continuing negative effects of the components crisis which could lead to a production loss of about 200,000 units over the year and rising raw materials prices, we are aiming to reach a full-year operating margin rate of the same order as the one of the first-half.”
Renault announced last year that it would cut nearly 15,000 jobs, including 4,600 at its core French operations, to steer itself out of a cash crunch exacerbated by the coronavirus crisis.
The company targeted savings of more than two billion euros over three years and turned its focus to electric vehicles as it seeks to restore competitiveness.
Renault had been navigating turbulent waters even before the health crisis, starting with the shock arrest of its former boss Carlos Ghosn on financial misconduct charges in 2018 which led to deep rifts in its alliance with Japanese partners Nissan and Mitsubishi.
The company said it has has resolved its cash crunch.
“We have taken an important step in the restoration of our key financial indicators, notably thanks to the return close to breakeven of our free cashflow this semester,” said chief financial officer Clotilde Delbos.
“Our strong liquidity position allows us to pursue our recovery with serenity,” she added.
tsz/spm/rl