Earnings

Peugeot-maker PSA's profit jumps on pricing, Opel synergies

Reuters with CNBC
Key Points
  • Speaking to CNBC's Julianna Tatelbaum, Carlos Tavares, Chairman of Groupe PSA said the group is ready for further synergies. 
  • The Group's chairman also demanded clarity from the U.K. authorities over Brexit, given the company's presence in the country. 
Carlos Tavares, CEO of PSA Groupe at a press conference in Germany on November 9, 2017.
Daniel Roland | AFP | Getty Images

French carmaker PSA Group delivered a sharp increase in first-half profit, as new models and the integration of Opel-Vauxhall more than made up for weaker emerging-market sales.

Recurring operating income at the maker of Peugeot and Citroen cars rose 10.6% to 3.34 billion euros ($3.7 billion), lifting its operating margin to a new record of 8.7% in January-June.

Shares were marginally lower shortly after the markets open.

"Our results are proving the sustainability of our performance despite the weakness of global markets," Chief Financial Officer Philippe de Rovira told reporters on a call.

"These headwinds were more than compensated by our efficiency and continuous efforts to save costs," he added.

The profit gain came despite a 12.8% drop in global sales announced earlier this month, as emerging markets weighed on PSA's overseas business.

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Groupe PSA's revenue is stable despite global market downturn, chairman says

Revenue fell by a more modest 0.7% to 38.3 billion euros, as new models such as the Citroen C5 Aircross and a trio of commercial van launches helped to lift pricing.

Speaking to CNBC's Julianna Tatelbaum, Carlos Tavares, Chairman of Groupe PSA said the group is ready for further synergies.

"We are in a competitive market and a competitive game, regardless of what's going to happen in the market what accounts for PSA is that we have a competitive mindset. We want to do better than all other car companies and that means that yes we have already grasped a number synergies but we are not short of ideas," Tavares said.

Net income jumped 24% to 1.832 billion euros for the first half, according to the French carmaker, which acquired the Opel-Vauxhall business from General Motors in 2017.

Brexit

The Group's chairman also demanded clarity from the U.K. authorities over Brexit, given the company's presence in the country.

"What we need is clarity, regardless of what's the decision that's going to be made, we need clarity. We need to have some capability to anticipate what's going to happen, because as you know in our industry, investments have a lead time of 3 years and if we don't have clarity we cannot make decisions, if we can't make decisions at one point in time something's going to go wrong so what we need know is clarity," he said.

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