Published on 26/04/2019 1:16:32 PM | Source: Reuters

Renault sticks to 2019 goals despite overseas sales slump

Posted in Top Stories| #World Market #Renault #Quarterly Result

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By Laurence Frost

PARIS - Renault clung to full-year targets on Friday as it posted a 4.8 percent drop in first-quarter revenue amid a decline in overseas sales and business with its alliance partner Nissan.

Revenue fell to 12.527 billion euros ($13.95 billion) for January-March as global deliveries declined by 5.6 percent to 908,348 vehicles, weighed down by Renault's withdrawal from Iran last year.

The revenue figure fell slightly short of the 12.6 billion expected by analysts, based on the median of nine estimates in a poll by Infront Data. On a like-for-like basis excluding currency effects, the decline would have been 2.7 percent.

Sales volumes were down in all regions outside Europe, where they rose 2 percent.

The global auto market contracted by 7.2 percent in the same period, said Renault's sales chief Olivier Murguet.

"In this context, Renault outperformed the market," Murguet said in a sales presentation to reporters and analysts.

Renault and its alliance with Nissan have been shaken by the ousting of former chairman and CEO Carlos Ghosn, who now awaits trial in Japan for alleged financial misconduct. At an operational level, Renault has also struggled with tightening emissions standards and a shift away from diesel.

Forthcoming model launches including a new Clio mini will lift sales later in 2019, Renault said, as it reiterated its full-year guidance.

That guidance includes higher revenue, positive automotive cash flow and a group operating margin close to 6 percent.

Countering the exchange-rate setbacks, pricing improvements and a demand shift to pricier vehicles boosted revenue by a combined 1.3 percent.

"Volumes were softer than expected, and price did not come close to offsetting the (currency) headwind in the quarter," Citi analyst Raghav Gupta-Chaudhary said in a note.

Sales to partners had a negative 3.1 percent revenue effect, as Nissan and Daimler bought fewer diesel engines and U.S. sales of Renault-built Nissan SUVs dwindled.

Last year's pullout from Iran under threat of U.S. sanctions resulted in a 31 percent decline for Renault's Africa, Middle East and India sales region, the carmaker said. Excluding Iran, global deliveries would have fallen a more modest 1.7 percent.

Sales volumes fell 5.3 percent in the Americas region and 18 percent in Asia-Pacific, including China.

Renault also cut its 2019 global auto market growth forecast to a negative 1.6 percent from a previously stable outlook. The European market is expected to be broadly flat, providing a hard Brexit is avoided, the carmaker said.

($1 = 0.8981 euros)

(Reporting by Laurence Frost; Additional reporting by Gilles Guillaume; Editing by Sudip Kar-Gupta)