Paris - Struggling French carmaker PSA Peugeot Citroen said on Wednesday it had suffered a first half net loss of 819 million euros ($989
million), more than reversing a year-earlier net profit of 806
The company, which has already announced 8,000 job cuts in France, said it will implement a 1.5-billion-euro cost reduction plan through to 2015.
Peugeot, France's biggest carmaker and the second-largest in Europe, had already indicated it would post a loss in the first half but the figure was worse than analyst estimates of around 209
million euros, as compiled by Dow Jones Newswires.
In a statement, Peugeot said revenues were down 5.1 percent in the first half to 29.6 billion euros while operating income was at breakeven, down from 1.16 billion euros in the first half of 2011.
The loss was mainly due to the auto division, which suffered a net loss of 662 million euros in the first half.
The cost cutting plan, dubbed “Rebound 2015” in the statement, will include 600 million euros in savings from reorganising French production, which includes the previously announced job cuts.
Another 550 million euros will come from reducing capital expenditures and 350 million euros in the form of cost savings expected from a tie-up with US giant General Motors announced earlier this year.
“The group is facing difficult times,” Peugeot chief Philippe Varin said in the statement.
“The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganisation of our French production base and a reduction in our structural costs,” he said.
“Restoring the group's competitiveness will secure its future,” he said.
Peugeot's sales in Europe fell 15.2 percent in the first half but were up 7.5 percent in China and 14.7 percent in Russia.
Peugeot said it expects the market to contract by a further eight percent in Europe but to grow by nine percent in Russia, seven percent in China and two percent in Latin America.
“The group is pursuing its strategy of brand upscaling with the successful launches of four hybrid vehicles, the Peugeot 208 and the roll-out of the DS range in China, Russia and Latin America,” it said.
Peugeot said its net debt had been reduced to 2.4 billion euros as of June 30, against 3.4 billion euros as of December 31.
The first-half loss per share stood at 2.73 euros, versus earnings per share of 3.55 euros in the first half of 2011. - Sapa-AFP