Renault posts loss, sees difficult 2010

Renault posts loss, sees difficult 2010

Paris: French carmaker Renault SA said Thursday that it lost euro3.07 billion ($4.23 billion) last year, mostly in the first half, and predicted another tough year in 2010.

The full year net loss is greater than the euro2.59 billion forecast by analysts and compares with 2008’s euro571 million net profit. Revenue fell 10.8% to euro33.71 billion in 2009.

In the second half, Renault lost euro356 million after government scrappage schemes held off the worst of the crisis.

Shares were down 2.9% at euro31.84 in Paris morning trade.

“We are continuing our work on building the Renault of the post-crisis period with the pursuit of the sales offensive in Europe," said CEO Carlos Ghosn in a statement.

“Economic conditions will remain difficult in 2010."

Renault said the European car market could contract by 10% this year.

It said it met both its targets in 2009: achieving positive cash flow the funds a company is able to generate after maintaining or expanding assets at euro2.09 billion and increasing market share, although by a modest 0.1%.

It used the cash flow to reduce debt and vowed to achieve positive cash flow again this year.

Last year, Renault slashed inventories, cut investment and reduced its headcount to save money.

Renault spokeswoman Frederique Le Greves said around 1,000 people should leave the company through attrition this year.

In 2009, Renault cut its workforce by 7,600 through a voluntary redundancy scheme and attrition. At the end of the year, the total headcount was 121,422.

In exchange for state help during the crisis, Renault promised to make no forced layoffs in France, but recent comments by industry minister Christian Estrosi suggested the government wants a bigger say in the running of the company.

Ghosn was summoned to the Elysee presidential palace to explain reports that it was considering transferring production of its popular Clio 4 model from France to Turkey. He issued a statement saying that the car would be built in both France and Turkey, where it is cheaper to produce.

In a conference call with analysts, Ghosn was quizzed about the influence of the French government, which owns around 15% of the company.

He said that while “some governments are more vocal than others," governments everywhere are sensitive about auto industry jobs."

“We have a duty to anticipate and explain before it happens," Ghosn said.

Renault also said it is seeking economies through its alliance with Japanese partner Nissan Motor Co. In 2009 the companies saved euro1.5 billion in synergies, and plan to save an additional euro1 billion this year.

The results compare to crosstown rival PSA Peugeot Citroen SA, which on Wednesday said it had lost euro1.16 billion in 2009 in line with analyst expectations compared with a net loss of euro363 million in 2008.