Renault SA’s first-half earnings exceeded recently upgraded expectations as the French carmaker continues to see strong demand and prices for new models like the Austral crossover.
Operating margin at group level rose to a record 7.6% the the six months through June, the company said Thursday, compared with guidance for a first-half operating margin of more than 7%.
Renault’s result chime with other carmakers holding up well despite consumers being hit by a surge in interest rates, high inflation and after easing supply-chain woes improve vehicle availability. Both rival Stellantis NV and luxury-car maker Mercedes-Benz Group AG reported better-than-expected earnings. Europe’s biggest carmaker Volkswagen AG is due to outline its results later Thursday.
The French manufacturer’s order book in Europe is at 3.4 months of sales at the end of June, and is set to stay above a target of 2 months through the year, the company said. First-half operating income more than doubled to €2.1 billion ($2.3 billion).
IPO Plan
Renault Chief Executive Officer Luca de Meo, leading Renault through a turnaround for the past three years, is pursuing a listing of the company’s electric-vehicle unit next year. The plan is facing some headwinds from aggressive price cuts by Tesla Inc. that are weighing on its flagship EV, the Megane E-Tech.
First-half sales of the model reached 23,000, Renault said Thursday, with the majority of deliveries of higher-end version of the vehicle.
The manufacturer took a significant step toward its initial public offering on Wednesday, when Japanese partner Nissan Motor Co. following tense talks backed Ampere with an investment of as much as €600 million, less than initially expected. Concerns about the sustainability of Renault’s pricing strategy have led to investor pushback on the planned share sale.
The company is also still dealing with some logistics troubles, leaving a high number of cars stranded at factories. Inventory as of June was 569,000 vehicles, slightly down from end-March, and transportation issues should improve during the second half, Renault said.
Read more: Nissan Backing Renault’s EV Efforts With Up to €600 Million