French carmaker Renault posted a wider-than-expected net loss today and said it would focus on generating positive free cash flow in a tough 2010 market.
Hit by the economic downturn, Renault posted improving results towards the end of 2009 after many governments introduced scrapping incentives to prop up sales.
Renault said it expected economic conditions to remain tough in 2010, and it saw a 10 per cent drop in the European market as a whole this year. It did not make an earnings forecast.
"Frankly we think that in 2010 there is still a lot of uncertainty and volatility and we don't want to spend our time every month correcting the earnings guidance," said chief executive Carlos Ghosn, also head of Renault's Japanese ally Nissan which this week returned to a third quarter profit and raised its full-year target.
"We think that 2010 is particularly obscure," Mr Ghosn said, adding the year was getting off to a good start in orders.
Renault shares fell 4 per cent by 10.00am, lagging a DJ Stoxx European Autos index down 0.85 per cent.
"As with Peugeot yesterday, the outlook is not very clear," said a Paris-based analyst. "Of course, there is a plan to reduce costs, but that's not enough."
PSA Peugeot-Citroen posted widening losses and refused to give an outlook beyond mid-year.
Last year, European new car sales fell just 1.6 per cent despite a savage crisis, thanks to the scrapping measures, but the market is expected to drop more this year.
The group wants to achieve positive free cash flow in 2010, after achieving the same objective in 2009. It said cost-cuts, new products, control of working capital requirements and alliance synergies would help achieve this. It also set a new target for €1 billion of synergies with Nissan for 2010, after achieving €1.5 billion last year.
Renault posted a full year net loss of €3.068 billion, wider than the Thomson Reuters I/B/E/S estimate of a €2.59 billion net loss.
The loss included contributions from Nissan and stakes in truckmaker Volvo and AvtoVAZ, the beleagured Russian car maker in which it has a 25 per cent stake.
Renault posted a full-year operating loss of €955 million, but only €9 million of that came in the second half, it said.
Full-year sales fell 10.8 per cent to €33.7 billion, but the group said it saw a 25 per cent increase in the last quarter of 2008, compared with a very weak fourth quarter 2009.
The group is currently working on a new medium-term plan and hopes to present it at the start of 2011, chief financial officer Thierry Moulonguet told reporters. He added he could not say what if any financial targets would be included.
Reuters