PARIS (Reuters) – Carmarker Renault took a 1.357 billion euro ($1.39 billion) net loss in the first half of this year from the cost of closing its Russian business in the wake of the Ukraine war, but it upgraded its full-year outlook because of improving profitability elsewhere.
Renault, which was the most exposed of the Western automakers to the Russian market, sold its majority stake in Russia’s biggest carmaker Avtovaz in May for a symbolic amount.
Away from Russia, the company said on Friday its turnaround strategy of focusing on selling fewer but more profitable cars was paying off. It said operating margins in H1 were 4.7%, against 2.1% in the same period last year, and it upgraded its forecast for full year margins to more than 5%.
“Despite all the headwinds related to the stop of the activity in Russia, the semiconductor crisis and cost inflation, the Group continues to improve its operating performance,” Renault CEO Luca de Meo said in a statement.
The global shortage of semiconductors, used in everything from brake sensors to entertainment systems, has cut into car production at many major carmakers.
Renault, which also produces cars under the Dacia brand and has an alliance with Nissan, is in the early stages of a restructuring its operations to be competitive as it shifts to electric vehicles.
Discounts on its cars are at their lowest levels in a decade, and higher-priced new models such as the Arkana compact SUV have improved profitability.
($1 = 0.9787 euros)
(Reporting by Gilles Gillaume and Christian Lowe)