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Renault improves its margins but remains weighed down by Russia in the first half

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Renault improves its margins but remains weighed down by Russia in the first half
Written by madishthestylebar

Despite good forecasts, Renault is suffering from the semiconductor crisis that is raging in the automotive sector.

The Renault group published on Friday a net loss of 1.36 billion euros in the first half linked to the sale of its activities in Russia. Better margins on its sales did not offset the 2.3 billion charge linked to the sale of its industrial activities in Russia, where the group dominated the market with the Lada brand.

Excluding Russia, net income from continuing operations was €657 million for the half-year. Despite sales volumes down 12% (excluding Russia), turnover remained stable (+0.3%) at 21.1 billion euros.

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The group improved its margins by selling more expensive and better equipped vehicles, with fewer discounts, posting 4.7% operating margin excluding Russia. Renault has thus slightly raised its forecasts for the year 2022, aiming for an operating margin of 5%, in line with its long-term objectives. The group confirmed that the semiconductor crisis would have an estimated impact of 300,000 vehicles on its production for the year 2022. The rise in the price of raw materials weighed on the accounts to the tune of 797 million euros.

Rise in Renault’s stock market

Renault’s stock price rose more than 6% on Friday after the publication of the results of the automotive group, amputated from its Russian activities but which took advantage of a global rise in car prices to improve its profitability and is optimistic for the future. ‘year. On the Paris Stock Exchange, the title rose by 6.58% around 9:30 a.m., the value of the action reaching 29.15 euros. The automaker nevertheless published a net loss of 1.6 billion euros for the first half of the year on Friday, against 368 million euros in net profit over the same period in 2021.

“Resurrection”

The group owes part of its success to its brand “price qualityDacia, including the Sandero, the best-selling car to individuals in Europe, all manufacturers combined. “The emergency resurrection phase is over at Renault“, underlined the general manager of the group Luca de Meo in front of analysts and during a press conference. “The phase of revolution is well underway“, with 25 new vehicles by 2025, especially in the upper segments that the group wants to conquer as a priority, launched the leader who arrived in early 2020 in place of Carlos Ghosn.

Renault also expects household confidence tostay weak“. “But we will be able to defend our prices“said Luca De Meo. Renault is due to present an update of its strategy in the fall.Renaulution“, with a dozen projects centered on electricity, which should involve a partial sale of the group’s activities in thermal cars. Hybrid and electric vehicles now represent 36% of Renault brand registrations in Europe, compared to 26% in the first half of 2021. Renault’s partners in the Alliance, Nissan and Mitsubishi, have yet to specify the extent to which they will participate in these projects. : “we left the door open“, launched Mr. de Meo.


SEE ALSO – How Russia Became an Empire

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