Renault Group has recovered in the first half of the year with a net profit of 368 million euros ($436 million), its savings plan being above its target, after a very difficult year for 2020. Renault warns that the semiconductor crisis could lead to a loss of around 200,000 vehicles this year due to assembly bottlenecks.
According to the company’s announcement Friday, its operating margin was 654 million euros in the first six months of the year, or 2.8% of sales. This represents a 26.8% year-on-year, or 23.4 billion euros ($27.7 billion), since 2020. In comparison, Renault reported 28 billion euros ($33 billion) in 2019, before the health crisis.
“Despite the uncertainty weighing on demand, the continued negative effects of the components crisis (…) and the rise in raw material prices,” said the company in a statement.
The group said it should achieve its €2 billion savings plan a year ahead of schedule: €1.8 billion has already been achieved, including more than €600 million in the first half of 2019.
Renault warns that the semiconductor crisis will cause assembly to slow and could result in a loss of production of around 200,000 cars over the year.
Automotive cash flow (free cash flow from operations) is negative at 70 million euros.
Renault Group Chief Financial Officer Clotilde Delbos stated, “With our solid liquidity position, we are confident of continuing our recovery fully in the next half of the year.”. This has been a very important step toward restoring our financial equilibrium.