Peugeot lifts earnings goal after record year

PSA Group, the French carmaker in talks to buy Opel from General Motors, announced its first dividend in six years and raised its medium-term profitability goal on Thursday after full-year
profit almost doubled.

Krisztian Bocsi | Bloomberg | Getty Images

The Paris-based maker of Peugeot and Citroen cars said stronger pricing, sales of higher-specification models and cost cuts lifted the automotive operating margin to a record 6 percent last year from 5 percent in 2015.

The carmaker raised its automotive margin goal to an average 4.5 percent for the 2016-18 period while declining to comment on the ongoing Opel takeover talks with GM.

"At this stage there can be no certainty as to the outcome of these talks," Chief Financial Officer Jean-Baptiste de Chatillon told reporters on a call.

PSA's 6.8 billion euros ($7.2 billion) net cash position allows the group to "deploy this cash to make profitable investments ... in the interest of our shareholders", Chatillon said.

Net income rose 92 percent to 1.73 billion euros, with recurring operating income up 18 percent at 3.235 billion euros. Revenue fell 1.1 percent to 54 billion euros.

PSA proposed a dividend of 0.48 euros per share on the 2016 earnings, its first such payout since 2011.

The company said it expected "stable" demand in the European, Latin American
and Russian markets this year, with China growing another 5 percent.

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