Renault seen reporting a net loss for full year 2009
By: EMMA VANDORE
Associated Press
02/09/10 10:51 AM EST
PARIS — Renault SA reports its full year results before the stock market opens Thursday.
WHAT TO WATCH FOR: Investors will be looking for any guidance on sales volumes and pricing once government scrappage schemes end. Debt levels will also be under scrutiny.
"Renault may come under some pressure to announce initiatives to reduce their debt levels" through measures such as selling its 21 percent stake in Swedish truck maker AB Volvo, said Philippe Houchois of UBS.
In a Thursday morning news conference, questions may be asked about the influence of the French government, which owns around 15 percent of the company.
In exchange for state help during the crisis, Renault promised to make no forced layoffs in France, but recent comments by Industry Minister Christian Estrosi suggested the government wants a bigger say in the running of the company.
CEO Carlos Ghosn was summoned to the Elysee presidential palace to explain reports that it was considering transferring production of its popular Clio 4 model from France to Turkey. He issued a statement saying that the car would be built in both France and Turkey, where it is cheaper to produce.
WHY IT MATTERS: The auto industry provides jobs for around 10 percent of the French work force and about 14 percent of France's exports.
Sales in 2009 were boosted by government scrappage schemes that are being phased out. Government budget constraints may prevent further help to the auto industry, even if people shy away from big ticket items like cars without the government incentives.
WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect Renault to lose euro2.59 billion ($3.56 billion) over the full year. Analysts expect annual revenue of euro33.23 billion.
In the first half, Renault made a net loss of euro2.71 billion as revenue dropped 24 percent to euro15.99 billion.
In 2009, Renault sold 2.31 million vehicles, down 3.1 percent from last year. The numbers were improved by a year-end surge as car buyers sought to benefit from the cash-for-clunkers scheme before it is phased out.
LAST YEAR: Over the full year, Renault reported net profit of euro599 million on revenue of euro37.79 billion.
