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New models lift Renault profit despite Russia writedown

Renault said its full-year profit increased by almost 50 percent last year on strong sales of new models, but the French carmaker wrote down its stake in Lada-maker AvtoVAZ amid a Russian car market slump.

Net income increased to 2.82 billion euros ($3.2 billion) in 2015 from 1.89 billion a year earlier on a 10.4 percent revenue gain to 45.33 billion euros, the company said on Friday. Its operating margin rose from 3.9 percent to 5.1 percent of sales, beating Renault's 5 percent mid-term goal.

Fabrice Coffrini | AFP | Getty Images

The results "mark a decisive step towards the achievement of our plan," Chief Executive Carlos Ghosn said in a statement.

But Renault took a 620 million euro hit from its 37 percent indirect stake in AvtoVAZ and said the bill was likely to rise as it injects more capital to shore up the carmaker in the face of collapsing Russian demand.

Discussions with other shareholders are ongoing, Chief Financial Officer Dominique Thormann said.

Besides writing down the value of its holding, Renault booked 395 million euros of AvtoVAZ losses for the year. The Russian market, which has approximately halved since 2012, is expected to fall a further 12 percent this year, Renault said.

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