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Renault cost cuts lift profit despite sales, currency decline

Cost-cutting at Renault delivered a 25 percent increase in first-half operating profit, the French carmaker said on Tuesday, even as currency headwinds and mounting inventories hurt sales and cash flow.

Operating profit rose to 729 million euros ($979.05 million) in the six months ended June 30, lifting the operating margin to 3.7 percent from 2.9 percent of sales, which fell 3 percent to 19.82 billion euros.

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"We have seen a significant increase in group profitability," Chief Financial Officer Dominique Thormann told reporters.

Fabrice Coffrini | AFP | Getty Images

"The improvement to our margin stems from a very firm cost control."

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Net income, which had been blighted by a 511 million euro writedown on Renault's Iran business a year earlier, rose to 801 million euros from 97 million euros.

The French carmaker increased its European market forecast for 2014, predicting a 3-4 percent expansion instead of the 2-3 percent previously forecast.

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