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Peugeot Citroen lifts profits despite falling sales

PARIS: French auto giant PSA, maker of Peugeot and Citroen cars, on Wednesday reported a jump in profits in the first si

Jul 24 2019

PARIS: French auto giant PSA, maker of Peugeot and Citroen cars, on Wednesday reported a jump in profits in the first six months of the year, despite falling unit sales and revenues.

PSA, which also owns the DS, Opel and Vauxhall brands, said in a statement that its bottom-line net profit rose by 23.7 percent to 1.8 billion euros ($2.0 billion) in the period from January to June.

By contrast, revenues slipped by 0.7 percent to 38.3 billion euros in the six-month period.

And, as reported earlier this month, unit sales were down 12.8 percent at 1.9 million vehicles between January and June.

"The market has become more difficult in the first half, but that didn't prevent us from turning in solid results," finance chief Philippe de Rovira told a telephone news conference.

"We overcame various headwinds thanks to our efficiency and the remarkable success of our new products."

Much of the drop in first-half sales was attributable to the halt in sales in Iran as a result of US economic sanctions against the Islamic republic.

But because the revenues from those sales are not included in the profit-and-loss accounts, they had "no financial impact", de Rovira said.

Another factor was a sharp drop in sales in China, where the PSA group booked a loss of around 300 million euros, the finance chief said.

The French carmaker is considering downsizing its production in China.

PSA chief executive Carlos Tavares urged Britain's incoming prime minister Boris Johnson for clarity and rapid decisions regarding the UK's exit from the EU.

PSA bought Opel-Vauxhall in 2017 and last year Tavares warned that uncertainty over Brexit could place in doubt the future of its factory in Ellesmere Port in northwest England.

"We're business people, we're responsible people, we need clarity," Tavares told a conference call with analysts.

Johnson, who was announced as the new leader of the governing Conservative Party on Tuesday and will officially take over the reins of power on Wednesday, has pledged to take Britain out of the EU come what may on October 31, even if that means an economically damaging "no deal" exit from the bloc.

His predecessor Theresa May spent nearly three years negotiating a divorce deal and was forced out after failing to get parliamentary support for the accord she finally struck.

"We need clarity and we'll adapt because we're agile," Tavares said.

"The only thing we have to say is please hurry up," Tavares said, but cautioned that leaving the bloc without a deal should not be on the table.

"A no-deal cannot be considered. This would be, of course, very bad for the UK, very bad for Europe, and very bad for all of us," Tavares said.

Copyright AFP (Agence France-Press), 2019