Peugeot plots asset sale as profits drop
PSA PEUGEOT Citroen yesterday pledged additional savings and asset sales including its Gefco transport and logistics unit as it struggles to cut debt and battle losses at its auto division.
Europe’s second-biggest carmaker recorded a second-half operating loss of €497m (£412.6m) at the core manufacturing arm, compared with a year-earlier €96m profit, the company said yesterday.
Peugeot raised its 2012 savings target by €200m to €1bn and pledged to reduce stocks of unsold cars to improve cash flow – a negative €1.6bn in 2011.
“These poor results do not undermine the strategy we’ve been following,” finance chief Jean-Baptiste de Chatillon told reporters. “We’re giving ourselves the resources to pursue it.”
PSA, the carmaker worst hit by Europe’s car slump, is struggling to finance the overseas expansion needed to reduce dependence on its stagnating home region.
As well as pulling out of the Le Mans 24 Hours endurance racing to save costs, chief executive Philippe Varin last month put a planned India factory on hold.
The company gave no earnings guidance for 2012 but pledged to raise a total of €1.5bn from asset sales including Gefco, which transports new vehicles between factories and distributors for Peugeot, Citroen and rival automakers.
PSA does not rule out selling a majority stake in the wholly owned business while remaining a “strategic shareholder,” Chatillon said.
Net income plunged 48 per cent to €588m last year as operating income fell 27 per cent to €1.32bn, excluding one-time gains and losses, trimming the group operating margin by one percentage point to 2.2 per cent.
Sales rose 6.9 per cent to €59.91bn.