Tue. Feb 25th, 2020

Renault declares losses of 141 million and the stock collapses



The Nissan crisis puts the company in red numbers for the first time in ten years and opens the door to a general restructuring of the group

The French car group yesterday declared losses of 141 million euros in the past year, which contrasts with the 3,302 million profits declared in the previous year. The net result was positive in 19 million, but it also contrasts with the 3,451 registered in 2018. These figures caused immediate reaction in the stock market, which in the first half hour after becoming public these figures lost five percent of its value. Something logical before the announcement of distribution of 1.10 euros per share, when last year the dividend was 3.55 euros.

The outlook for next year is equally pessimistic, as the group declares that it will have an operating margin between 3 and 4 percent, when in the year that has just closed it has been 4.8. The decline in markets in Europe and Russia, estimated at 3%, can continue to hamper the company’s figures, which it expects to close 2020 with a positive cash flow, before applying restructuring costs. The arrival to the presidency of Luca de Meo, who will assume the executive position in July, can give a boost to the company, but the uncertainty of China’s economic evolution is a negative fact that not only plans in Renault, but in everything The engine sector.

Benefit-free fall

According to the balance presented by the company’s executives, the main reason for this negative data is the Nissan crisis, which in the past year contributed only 242 million euros, compared to the 1,509 with which it contributed a year earlier. And is that the benefits of the Japanese partner fell 87%. Other partners, Chinese and Daimler, also accounted for losses of 432 million, instead of the positive 31 million of 2018. Nor was the business of the Russian subsidiary Autovaz important in a market that is in crisis. The depreciations of the South American currencies, where Renault is very strong especially in Brazil and Argentina, were not good news, which joined the fall of other important markets for the rhombus brand such as Turkey or Algeria.

But regardless of external reasons, the truth is that Renault sales in the world have fallen 3.4% despite having reached 3.8 million units. With all this, the turnover, which was 55,537 million, decreased by 3.3% and the operating margin reached the figure of 2,662 million, with a decrease of 950 million. In the indebtedness section, despite maintaining stable costs, it increased by 89 million, to 442 million, due to the decrease in dividends from unconsolidated shares.

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