Renault weighed down by Russia but improves its margins

The sale of its Russian activities weighed on Renault’s accounts in the first half, but the French car group took advantage of an overall rise in car prices to improve its profitability and is optimistic for the year.

The automaker on Friday published a net loss of 1.6 billion euros for the first half, against 368 million euros in net profit for the same period of 2021.

Investors applauded: Renault’s stock price jumped more than 6% at the opening on Friday.

Better margins on its sales certainly did not offset the 2.3 billion euro charge linked to the sale of Avtovaz in Russia, where the group dominated the market with the Lada brand, acquired in 2014 and sold to the Russian state in May, following the outbreak of war in Ukraine.

The group’s half-year turnover remained stable (+0.3%) at 21.1 billion euros, despite sales down 12% (excluding Russia), slowed by shortages of electronic chips.

Because the group has improved its margins by selling its vehicles more expensive, at higher levels of finish, and with fewer discounts. It shows 4.7% operating margin excluding Russia. Net income from continuing operations was 657 million euros for the half-year.

Hannah Bentley

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