- Associated Press - Thursday, February 14, 2019

PARIS (AP) - In its first results since the downfall of former chairman Carlos Ghosn, French carmaker Renault reported a 35 percent slump in profits last year and warned about the impact to business if Britain crashes out of the European Union next month without a deal.

Renault said Thursday that sales last year declined by 2.3 percent to 57.4 billion euros ($64.9 billion), which contributed to a sharp fall in net profit to 3.45 billion euros, compared to 5.3 billion euros the previous year. A lower contribution from partner Nissan also hit profits - Renault has a 43.4-percent stake in the Japanese firm.

Chief Executive Thierry Bollore said growth this year was likely to be moderate with the company targeting an operating margin of around 6 percent.

“We expect the worldwide market and, the European market to remain stable, on the condition there is no hard Brexit,” Bollore said. “But we’re making simulations, we are getting prepared.”

The French car maker said the downturn in sales was mainly due to a withdrawal from the Iranian market and to the decline in diesel sales. The company noted that the loss in revenue was because of differences in exchange rates.

Ghosn, the face and driving force for the alliance among Renault, Nissan and Mitsubishi, has been detained in Tokyo since November. He has been charged with falsifying financial reports in under-reporting compensation and breach of trust in having Nissan Motor Co. shoulder investment losses and paying a Saudi businessman.

His arrest has rocked the alliance, which is reshaping its management. Renault’s new chairman, Jean-Dominique Senard, is set to meet with Nissan CEO Hiroto Saikawa during a trip to Japan this week to discuss the future of their partnership. Asked by a reporter, Bollore did not say whether Renault is pushing to have Senard - who is likely to join the Nissan’s board -appointed Nissan’s new chairman.

Also asked whether Nissan should get more say in their future relationship as Nissan is making more in profit than Renault, Bollore said the alliance “should benefit each company. We are not reasoning in terms of relative weight.”

Bollore made only a few comments on the former chairman’s situation but said he is regularly catching up on Ghosn’s news. He added Renault’s internal investigation on Ghosn’s past activities is nearly completed.

“We are going to let people work, it will take a few weeks and then we will find out whether irregularities took place within our company.”

Renault said earlier this week it won’t pay Ghosn millions of euros in compensation. Renault also canceled shares granted to Ghosn from 2015 to 2018, which were subject to his continued presence at Renault. The board noted “that such condition is not met, thereby triggering the loss of Mr. Ghosn’s rights to the definitive acquisition of such shares.”

A spokeswoman from Renault said around 450,000 shares will be canceled. At the current share price of around 57 euros ($64), that is worth almost 26 million euros ($30 million).

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide