Income soar at Peugeot maker PSA forward of Fiat merger

FILE PHOTO: A PSA Group brand is seen behind a automotive displayed throughout French carmaker’s information convention as they announce the corporate’s 2018 outcomes at their headquarters in Rueil-Malmaison, close to Paris, France, February 26, 2019. REUTERS/Christian Hartmann

PARIS (Reuters) – Peugeot maker PSA Group mentioned profitability reached recent highs in 2019, although the French agency underscored a dark outlook for automotive gross sales in markets like Europe this yr because it pursues its merger with Fiat Chrysler (FCHA.MI).

PSA (PEUP.PA), which additionally produces vehicles below the Citroen and DS manufacturers, has trimmed prices in areas equivalent to buying because it built-in its acquisition of Opel and Vauxhall, boosting working margins to a file 8.5% final yr.

It additionally offset a stoop in car gross sales by promoting pricier SUV fashions, with launches together with the Citroen C5 Aircross serving to to raise revenues by a higher-than-expected 1% to 74.7 billion euros ($81.2 billion).

That has helped it stand out in a automotive market the place some rivals together with France’s Renault (RENA.PA) have struggled with sliding revenues and income, amid a broader downturn in demand.

PSA’s group web revenue elevated 13.2% to a file 3.2 billion euros, and the corporate elevated its dividend towards 2019 outcomes to 1.23 euros per share, up 58% from 2018 ranges.

Fiat additionally posted extra upbeat outcomes than most earlier in February. PSA and Fiat struck a deal in December to create the world’s fourth largest carmaker, in a bid to raised address a market turmoil and the price of making less-polluting autos.

The 2 nonetheless face headwinds this yr, together with because the coronavirus outbreak in China paralyses manufacturing within the nation and hits carmakers’ provide chain, and with PSA forecasting a 3% contraction in Europe’s automotive market this yr.

PSA Monetary Chief Philippe de Rovira mentioned the influence of the coronavirus disaster was nonetheless tough to evaluate. The agency’s factories in Wuhan, on the epicenter of the outbreak, have been at the moment because of reopen within the second week of March, he added.

PSA had already suffered a complete 700 million euros in losses and writedowns in China in 2019, the place its automotive gross sales have tumbled, and the place it’s exiting a three way partnership with China’s Chongqing Changan Car (000625.SZ).

Reporting by Gilles Guillaume and Sarah White; Enhancing by Tom Hogue and Keith Weir

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