PARIS (Reuters) - French carmaker Renault (RENA.PA) is targeting further sales and earnings improvement from the launch of new models after full-year profit more than tripled in 2014 thanks to strong European sales and cost-cutting.
Net income jumped to 1.89 billion euros (£1.4 billion) last year from 586 million in 2013 despite a deepening Russian market slump, as revenue edged 0.3 percent higher to 41.06 billion euros, the company said on Thursday.
Renault shares jumped eight percent to hit a 10-month high. The stock has gained 27 percent in the last month, giving the company a market value of 22.2 billion euros.
Renault’s numbers amounted to “a strong set of earnings considerably above expectations despite weakness in key emerging markets”, Citi analyst Philip Watkins said. The net income figure beat the 1.76 billion euros forecast by analysts.
The group’s European 2014 sales were boosted by new models including the Captur mini-SUV and revamped Clio mini, as well as no-frills vehicles from budget brand Dacia. Global deliveries rose 3.2 percent in spite of weakening demand in countries such as Brazil and a 10 percent market contraction in Russia.
Chief Executive Carlos Ghosn credited an “unprecedented product offensive” for its performance.
The rollout of new models continues in 2015 with an update to the large Espace -- revamped as a crossover -- followed by the Kadjar compact SUV and a replacement for the mid-sized Laguna sedan.
Forecasting a two percent increase in global industry production this year, Renault pledged to increase deliveries and revenue while further lifting profitability and maintaining positive automotive cash flow.
Earnings last year were helped by cost cuts that saved 844 million euros, thanks in part to a 2013 competitiveness deal with French unions in return for domestic production pledges. Renault said on Thursday it would hire 1,000 new workers in its home country this year.
“The improvement in profitability came mainly from cost-competitiveness,” Chief Financial Officer Dominique Thormann told reporters.
A weakening of emerging-market currencies put a 471 million euro dent in last year’s earnings, but restructuring and depreciation costs roughly halved from 2013 levels when the sanctions-driven collapse of Iranian sales led to big charges.
Renault’s losses at Russian automaker AvtoVAZ, controlled by Renault and Japanese alliance partner Nissan (7201.T), widened to 182 million euros last year from 34 million in 2013.
The French carmaker announced a three-week stoppage at its own Moscow plant on Monday as analysts as Western sanctions and a sagging rouble continue to weight on the Russian economy.
Reporting by Laurence Frost; Editing by James Regan and Keith Weir