Peugeot maker improves profit with sales of pricier SUVs

 Publish date: Wed, 24 Jul 2019, 8:28 PM

SINGAPORE: Peugeot maker PSA Group’s profit margin widened to a record in the first half of the year as the French carmaker cut costs and used the sale of more expensive models as antidotes to the deepening slump in the global auto industry.
The company that also makes Citroen cars reported on Wednesday a first-half recurring operating margin of 8.7 per cent at its automotive division, well above a target of at least a 4.5 per cent over the 2019-2021 period.
It also joined a chorus of rivals in confirming vehicle demand is slowing, predicting declines this year in both Europe and China.
“This is a hugely impressive result,” Evercore analyst Arndt Ellinghorst wrote in a note, adding that PSA is now the benchmark for margins of premium brand manufacturers.
The shares rose 1.9 per cent to 23.15 euros as of 11:19 a.m. in Paris, a three-month high.
PSA’s improved results stand out amid the gloom that has descended upon the sector as markets shrink.
PSA depends heavily on European countries for its sales, which dropped 13 per cent globally to 1.9 million vehicles in the first half.
Daimler AG has issued a string of profit warnings and car part-makers Continental AG and Faurecia SA have significantly lowered their expectations for global vehicle production.
While the company’s earnings beat analyst expectations, its margin got a boost by excluding restructuring charges from operating profit, Bloomberg Intelligence analysts said. Those reflect cost-cutting initiatives at recently-acquired Opel and Vauxhall, but also Peugeot, Citroen and DS.
Chief executive officer Carlos Tavares told analysts he sees restructuring charges rising across European automakers due to the need to make electric and hybrid cars to comply with European regulations on car emissions.
As the share of electric vehicles in PSA’s sales rise, the company will seek to offset the lower profitability of electric cars by accelerating cost cuts, he said.
Electric versions of half the lineup will be available by 2021, and across PSA’s entire product range four years later, according to a spokesman.
In 2018, sales of all-electric and hybrid vehicles accounted for less than one per cent of PSA’s registered sales.
“We are ready for electrification and to embrace the next technological challenges,” Tavares said.
Since arriving in 2014, Tavares has turned around a struggling PSA by focusing relentlessly on cutting costs and adding scale. He reiterated Wednesday that the company is open to potential tie ups. PSA held talks with Fiat Chrysler Automobiles NV earlier this year to build a new “super platform,” yet the discussions failed to result in a deal. The Italian-American company then nearly slipped into the arms of French rival Renault SA, before that combination finally collapsed.
 - Bloomberg


Share this

  Be the first to like this.


209  236  550  1330 

Top 10 Active Counters
 MNC-PA 0.040.00 
 ARMADA 0.31-0.005 
 KNM 0.395+0.015 
 GPACKET-WB 0.2650.00 
 VSOLAR 0.095-0.005 
 KOMARK 0.37+0.02 
 SUMATEC 0.025-0.005 
 OCK-WA 0.13-0.01 
 HSI-C7E 0.22+0.01 
 KNM-WB 0.1950.00 


2. [转贴] 巴菲特告訴孩子:成為富有的人,一生只需要3種投資 Good Articles to Share
3. When can ego be good and when can it be bad? Koon Yew Yin Koon Yew Yin's Blog
4. 《《 这只股走了一大轮,是什么原因导致这一路的上涨呢? 》》 StockBuddy
5. 中东局势混乱国际油价是否会继续往上移?? 大马股市在油气(Oil & Gas)板块有没有较低风险的隐形黑马吗? Ten Ninety
6. Four simple reasons why Alam Maritim can hit 20 sen Good stocks to share
7. 中东局势混乱国际油价是否会继续往上移?? 大马股市在油气(Oil & Gas)板块有没有较低风险的隐形黑马吗?(Part 2) Ten Ninety
8. 油价昨日彪涨,还能买入吗?By投资有理 投资有理·于你
Partners & Brokers