Renault posts record loss of 7.3 billion euros as pandemic hits sales

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© Reuters. FILE PHOTO: Logo of Renault is pictured at a dealership in Nantes

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PARIS (Reuters) – French carmaker Renault (PA:) posted a record net loss of 7.292 billion euros (6.61 billion pounds) in the first half of the year, as the COVID-19 pandemic hampered its turnaround efforts while losses at alliance partner Nissan (T:) also weighed.

Group operating losses, factoring out the effect of Nissan’s losses, were at 2 billion euros, the company said, compared with operating income of 1.5 billion euros last year. Sales slumped 34.9%, a result the company attributed mainly to the global COVID crisis.

Renault, just like its alliance partners Nissan and Mitsubishi Motors Corp (T:), is embarking on a major turnaround programme, and burned through $6.375 in cash over the first half.

“Although the situation is unprecedented, it is not final,” new Renault Chief Executive Luca de Meo said in a statement on the firm’s first-half performance. “I have every confidence in the group’s ability to recover.”

Global automakers have been hit hard by the pandemic, which has kept many customers away from car dealerships.

But the Renault-Nissan alliance has been hit especially hard as it was already weakened by low margins on its sales, and boardroom turmoil surrounding Carlos Ghosn, the architect of the alliance who was ousted in 2018.

Nissan Motor Co this week warned of a record $4.5 billion operating loss this year and its lowest sales in a decade. Nissan’s negative contribution accounted for 4.817 billion of Renault’s net losses, the French firm said on Thursday.

Renault’s performance was worse than investors had expected. Analysts’ consensus forecasts were for a net loss of around 5 billion euros and operating losses of 1.8 billion euros, according to Refinitiv data.

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