Peugeot posts profit as new models spur recovery
Published 28/07/2010 | 10:48
PSA Peugeot Citroen, Europe’s second-largest carmaker, reported six-month net income that beat estimates and forecast its first full-year operating profit in two years as a global economic recovery spurs demand.
First-half net income was €680m, compared with a €962m loss a year earlier, the Paris-based carmaker said in an statement.
Analysts had expected profit of €416.7m, based on estimates compiled by Bloomberg. The company forecast 2010 earnings before interest and taxes of €1.5bn.
Chief Executive Officer Philippe Varin plans to expand in emerging markets to reduce dependence on Europe, which accounts for almost two-thirds of volumes.
First-half sales surged 21pc to €28.4bn, buoyed by the new Citroen C3 subcompact and Peugeot 3008 and 5008 minivans.
“These are very respectable numbers,” said David Arnold, a London-based analyst at Credit Suisse with an “underperform” rating on Peugeot shares.
“There’s still a question-mark over pricing going forward -- Peugeot and other mass makers have been incentivising quite heavily to move product.”
The carmaker outpaced its European home market’s 0.6pc growth in the first half, raising its share of industrywide registrations by 0.8 percentage points to 13.7pc, according to data from the Brussels-based European Automobile Manufacturers Association.
Market share gains
First-half results were “driven by market-share gains and the benefits of the performance plan,” Varin said in the statement.
Helped by a second joint venture in China announced this month, “we’re now confident that we will generate half of our vehicle sales outside Europe by 2015,” he said.
Peugeot, which today gave its first 2010 earnings forecast, posted its last full-year operating profit in 2008.
First-half Ebit excluding one-time items was €1.14bn compared with an €826m loss a year earlier. The automotive division’s operating profit was €525m.
Peugeot today predicted “double-digit growth” in China’s auto market and an increase close to 9pc in Latin America.
The carmaker said the European market will decline 7pc in 2010, the lower end of its previous forecast.
Peugeot’s global car and light-truck sales surged 17pc to 1.86 million vehicles helped by European government incentives to scrap older cars and new models, the company said this month.
“Peugeot has done quite well in the first half with a very strong volume performance,” said Mike Tyndall, a London-based automotive specialist with Nomura Securities.
“The key focus is whether they can stay profitable in the rest of the year -- and on the strategy going forward.”