February 12, 2015 / 6:47 AM / 3 years ago

Renault pledges 2015 profit gain as product offensive bites

PARIS, Feb 12 (Reuters) - French carmaker Renault said on Thursday it was targeting further sales and earnings improvement this year after strong European deliveries of no-frills cars and mini-SUVs more than tripled full-year profit.

Renault’s net income jumped to 1.89 billion euros ($2.14 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 in a statement.

Operating profit rose almost 30 percent to 1.61 billion euros, lifting the company’s operating margin to 3.9 percent from 3 percent, with profitability at the core automotive division rising in step.

Chief Executive Carlos Ghosn credited an “unprecedented product offensive” for Renault’s full-year performance, adding in the statement that it “positions us on track to achieve our strategic plan”.

The group’s European sales were boosted in 2014 by new Renault models including the Captur mini-SUV and revamped Clio mini, as well as low-cost Dacia brand. Global deliveries rose 3.2 percent in spite of weakening demand in markets such as Brazil and a 10 percent market contraction in Russia.

Renault’s losses at Russian automaker AvtoVAZ - which it controls indirectly with Japanese affiliate Nissan - widened to 182 million euros last year from 34 million in 2013.

The French carmaker also announced a three-week stoppage at its own Moscow plant on Monday as analysts predict that the Russian market could contract as much as 25-35 percent this year under the weight of Western sanctions and a sagging rouble.

Forecasting a 2 percent increase in global auto production this year, Renault pledged to increase deliveries and revenue before currency effects and further increase profitability at group and auto-division levels, with positive cash flow at the core manufacturing division. ($1 = 0.8837 euros) (Reporting by Laurence Frost; Editing by James Regan)

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