Renault profit beats expectations on Dacia demand

PARIS: Renault SA reported 2014 earnings that jumped 30%, beating analysts’ predictions, as lower labour costs in France and higher sales of budget Dacia models helped offset tumbling demand in Russia and Latin America.

Operating profit rose to €1.61 billion ($1.82 billion) from €1.24 billion a year earlier, the Boulogne- Billancourt, Francebased company said in a statement yesterday. The figure exceeded the €1.45 billion average of 15 analyst estimates compiled by Bloomberg.

Revenue gained just 0.3% to €41.1 billion.

Renault relied on demand for inexpensive models in Europe last year to sustain deliveries as a sales push outside the region fell flat because of economic woes in Russia, Brazil and Argentina.

The company, which owns 43% of Japanese carmaker Nissan Motor Co, is sticking to a strategy of expanding in emerging markets, with plans to introduce an ultra-low-cost vehicle in India this year and preparations to start building cars in China in 2016.

In 2015, Europe’s third-largest carmaker targets a higher operating margin after its return on sales widened to 3.9% last year from 3% in 2013.

Renault also forecast higher deliveries and revenue this year with European and global car demand projected to rise by 2%.

“This year should allow us to take a new step forward, thanks to an unprecedented product offensive,” chief executive Carlos Ghosn said in the statement.

To underpin its growth, Renault plans to hire 1,000 people in France this year.

At the next shareholder meeting, Renault plans to recommend increasing its annual dividend to €1.90 per share from €1.72 the previous year.