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Renault revs up profitability in 2024 / Photo: JULIEN DE ROSA - AFP/File
NYSE - LSE
Renault revs up profitability in 2024
Renault confirmed on Thursday it defied headwinds in the car industry by boosting revenue and attaining record profitability in 2024 thanks to the success of its new line up of vehicles, although net profit sank as it scaled back its partnership with Nissan.
The group, which also includes the budget Dacia brand and sportscar Alpine, saw revenues rising by 7.4 percent to hit 56.2 billion euros ($58.6 billion), with its operating profit margin coming in at a record 7.6 percent.
However net profit sank to 800 million euros due to a 1.5-billion-euro loss it booked on the sale of Nissan shares.
Without the sale of Nissan shares, profit would have come in at 2.8 billion euros, a 21 percent increase on 2023.
"This excellent performance is the result of our product offensive and cost cutting," chief financial officer Thierry Pieton told journalists.
"Renault Group has never been so strong and benefited from such solid fundamentals," he added.
Chief executive Luca de Meo praised the "in-depth transformation of the company".
The board proposed a dividend payment of 2.20 euros per share, an increase of 19 percent from last year.
Renault's new line up of vehicles -- it launched 10 models in 2024 -- accounted for 24 percent of sales in the final quarter of 2024, which is a good indication for the start of 2025, said Pieton.
The company's new compact Renault 5 electric car has booked orders at a higher rate than expected in Europe, where it is available.
Pieton said the Renault 5, which harks back to a popular model from the 1970s through 1990s, was bringing clients into dealerships and had a "halo effect" on sales of other models.
Electric models still represent only nine percent of Renault's sales in Europe, however, where hybrids are currently the favorite of consumers.
Tighter emissions regulations this year could cost the company about one percentage point of revenue in 2025, around 550 million euros, it estimates, as it cuts prices on electric models to meet sales targets.
Renault targets keeping the operating margin above seven percent in 2025.
Pieton said Renault wasn't keen in joining up with other carmakers to meet the emissions requirements and expressed the hope they would be relaxed.
F.Gallego--HdM
