Renault warned revenue may decline this year, scrapping a previous goal, after first-half profit was hit by weakening car demand and an earnings collapse at alliance partner Nissan in the wake of the Carlos Ghosn scandal.
“Given the degradation in demand, the group now expects 2019 revenues to be close to last year’s,” Renault said - abandoning an earlier pledge to increase revenue before currency effects.A broad-based auto sales downturn has rattled the sector, prompting profit warnings and compounding challenges for Renault and Nissan as they struggle to turn the page on the Ghosn era. Their former alliance boss is now awaiting trial in Japan on financial misconduct charges he denies.
But Renault’s own performance - reflected in an operating margin that declined to 5.9 per cent from 6.4 per cent the year before - compares less favourably with domestic rival PSA Group. The Peugeot maker bucked the downturn with a record 8.7 per cent profit margin unveiled on Wednesday. Citi analyst Raghav Gupta-Chaudhary flagged a lower-than-usual 258 million euros in joint purchasing savings for Renault. “We thought this would be weak in light of the well-documented difficulties with the alliance,” he said.
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