French carmaker PSA defies sales slowdown with record profits

Its net profit was 13.2 per cent higher in 2019 compared to 2018

By AFP - Feb 26,2020 - Last updated at Feb 26,2020

Chairman of the Managing Board of French carmaker PSA Group Carlos Tavares (left) listens to CFO Philippe de Rovira (right) after the presentation of the group full year 2019 financial results at the PSA headquarters in Rueil-Malmaison, on Wednesday (AFP photo)

PARIS — French car giant PSA Peugeot-Citroen, currently in the process of merging with rival Fiat Chrysler, said on Wednesday it shook off a drop in sales to notch up record profits in 2019.

“We have achieved record results in 2019,” Chief Executive Carlos Tavares said in a statement.

The group, whose brands include Opel in Germany and Vauxhall in Britain, booked bottom-line net profit of 3.2 billion euros ($3.5 billion) last year, an increase of 13.2 per cent over the figure for 2018.

Despite a 10.3 per cent drop in unit sales to 3.5 million vehicles worldwide, revenues inched up 1 per cent to 74.7 billion euros.

PSA said its operating margin — which measures underlying profit as a proportion of sales — increased by 0.8 percentage points to 8.5 per cent.

In terms of vehicles sold, PSA suffered from its absence from the key US market and a shrinking market share in China.

But the group attributed the modest increase in revenues to an improved product mix and higher prices, which it said helped offset negative exchange rate effects and falling volumes.

Looking ahead to anticipated market developments in the current year, PSA said it forecast a decline of around 3 per cent in Europe but no change in Latin America.

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