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Volvo sale helps Renault post a profit

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Volvo sale helps Renault post a profit
10:27 CET+01:00
Half of French automaker Renault's $2.4 billion net profit from last year came from selling a stake in Swedish group AB Volvo.

The capital gain from the stake in AB Volvo was €924 million.

Despite reporting a 15.3-percent drop in net profit, Renault's results were far stronger than those of crisis-stricken PSA Peugeot Citroen which has reported a 2012 loss of €5.0 billion owing mainly to writedowns to reflect weakness in the French auto market.

The price of shares in Renault jumped by 6.47 percent in early trading to €45.98, with traders welcoming the profit outcome and positive comments by the company for its finances this year.

Renault was also boosted by results at its associated companies, Nissan of Japan and Avtovaz of Russia, as well as Volvo. These contributions amounted to €1.5 billion, the same as in 2011.

Sales fell by 3.2 percent to €41 billion.

Renault said that it had cleared its debts and had a net positive cash position of €1.49 billion at the end of 2012.

Renault, which also sells under the brands of Dacia and Samsung Motors, does about half of its business outside France and is less dependent that Peugeot on the European market, which is currently depressed.

Renault chief executive Carlos Ghosn said in a statement: "In Europe, in a very difficult context, particularly in France, the group kept to a rigorous commercial policy and began to renew its range (of vehicles)."

AFP/The Local/at

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