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Volvo sale helps Renault post a profit

Half of French automaker Renault's $2.4 billion net profit from last year came from selling a stake in Swedish group AB Volvo.

Volvo sale helps Renault post a profit

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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ABB

Swedish engineering giant ABB to quit Russia over Ukraine

Swedish-Swiss engineering giant ABB said on Thursday it will quit Russia as a result of the war in Ukraine and the related international sanctions against Moscow.

Swedish engineering giant ABB to quit Russia over Ukraine

Russia accounts for only one or two percent of ABB’s overall annual turnover and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

“ABB has decided to exit the Russian market due to the ongoing war in Ukraine and impact of related international sanctions,” the group said in a statement.

Russia accounts for only one or two percent of ABB’s overall annual sales and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

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A large number of major western companies have pulled out of Russia since Moscow invaded its pro-Western neighbour on February 24.

“When the war broke out, ABB stopped taking new orders in Russia,” the group said.

At the same time, it said it continued to fulfill “a small number of existing contractual obligations with local customers, in compliance with applicable sanctions.”

Most of ABB’s dedicated Russian workforce has been on leave since March “and the company will do its best to support them as it realigns its operations in a controlled manner,” it said.

ABB has about 750 people in Russia and two production sites in the country located in the Moscow region and Lipetsk, as well as several service centres.

Separately, the group said that its net profit fell by 50 percent to $379 million in the second quarter, largely as a result of one-off charges, but also the cost of withdrawing from Russia.

Sales, on the other hand, grew by six percent to $7.2 billion in the period from April to June, ABB said.

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