Peugeot-Citroen revs up profitability

PARIS: French automaker Peugeot Citroen (PSA) said on Wednesday it made a record net profit of 1.26 billion euros ($1.46 billion) in the first half of the year, boosting its operating margin to record levels despite increases in supply costs.

Sales rose by five per cent over the same period last year to 29.1 billion euros, including a 3.6 per cent rise in auto sales revenue to 19.8 billion euros.

Earlier this month, Peugeot had reported that unit auto sales rose by 2.3 per cent overall to nearly 1.58 million vehicles, with its return to Iran compensating for a nearly 50 per cent plunge in sales in China. Its operating profitability margin rose to 7.3 per cent, also a record, despite changes in currency values also working against the carmaker. “We had an improvement in the operational performance in all of our divisions” said Jean-Baptiste de Chatillon, the financial director of the company which also has a car parts and a credit division.

“The automobile division in particular delivered a level of performance which more than compensated for the numerous headwinds that we encountered,” he added.

The results are in line with plans by the automaker, which had to be bailed out by the French state and Chinese auto group Dongfeng in 2014 to stave off bankruptcy, to gradually increase its profitability.

It is also trying to return to being Europe’s second-largest auto manufacturer by buying General Motors’ European brands Opel and Vauxhall, with a deal announced earlier this year still needing approval from workers and regulators. — AFP