Record Renault sales and revenue gained last year by Renault’s French carmaker, which strengthens Carlos Ghosn’s position as chairman and CEO of the French government against the clearer offsetting plan and the deeper integration of the strategic partner with Nissan’s Japanese car factory.
According to a report released on Friday, the company’s operating profit rose 17 percent to EUR 3 billion to EUR 854 million, while sales revenue grew by 14.7 percent to EUR 58 billion to EUR 770 million, driven by strong European demand. Revenue-based profitability improved by 0.2 percentage points to 6.6 percent. Analysts had slightly higher turnover of EUR 59.25 billion, operating profit of EUR 3.65 billion.
The net profit amounted to EUR 5 billion to EUR 210 million, up by 47 percent over the previous year’s EUR 3 billion to EUR 543 million. Profit on shareholders increased by 49.6 percent to EUR 5 billion to EUR 114, EUR 18.85 per share last year. In 2016, the value of earnings per share was EUR 12.57.
The company’s management increased its proposal on dividend per share by 12.7 percent to € 3.55 and promised to retain its revenue-earning rate above 6 per cent this year, despite the weakening rates, which amounted to EUR 303 million last year profits. Renault mentioned the Argentine Peso, the Turkish lira and the British pound impairment.
Renault’s stock ran a 2.92 percent gain on Friday morning, but at a daily maximum of 4.71 percent plus on the Paris Stock Exchange thanks to the record-breaking flash report.
In 2017, Renault sold 3.76 million cars, 8.5 percent more than the 3.47 million in 2016, while the worldwide car sales of cars rose 2.3 percent. Sales of Renault have risen last year for the fifth year. The market share of the Group increased by 0.2 percentage points to 4.0 percent.
This year, Renault expects a 2.5 percent increase in world market turnover, including one percent in Europe and France. Russian car market turnover is 10 percent this year, while Brazil and China grow by more than 5 percent and Indian by six percent.
Strong financial performance can help the President and CEO to stand up against Renault’s largest shareholder, the French government’s pressure. The French state has 15 percent ownership and the board has two seats, and the government wants to achieve closer relations with Japanese Nissan. Ghosn, however, made it clear that the two carmakers did not want to merge, especially under the French conditions, and it is not possible for the merger until the French state is the largest shareholder.
The Renault Board of Directors proposes to the Shareholders at the June General Assembly to extend Carlos Ghosn’s term of office for a further four years, during which he “decides to make the (irreversible) alliance of (partner carmakers)” and “confirm the succession plan”.
Renault has 43.4 percent share of Nissan which 34 percent owned by Mitsubishi Motors. Earlier it was expected that Ghosn would have given control to a new CEO and oversaw the Renault-Nissan-Mistsubishi alliance as chairman of the board. This idea is opposed by the French Government.