France’s Boulogne-Billancourt (Reuters):For the first time in four years, French automaker Renault (EPA:RENA) declared a dividend as its continuing transformation began to show results in the form of higher operating margins than anticipated.
The business said on Thursday that its 2022 group operating margin increased from the previous year to 5.6% owing to a strategy centred on new launches, electric cars, and fewer discounts, despite the fact that it returned to a deficit as a result of its exit from Russia.
Chief Executive Luca de Meo declared in a statement that “Renault Group’s basics have been properly cleaned up, and there will be no going back.” “The financial projection for 2023 and the dividend return demonstrate this.”
Renault is now aiming for a group operating margin of 6% or higher this year as it updates its 24-year-old partnership with Nissan (OTC:NSANY).
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Analysts were closely watching Renault’s automotive operating free cash flow, which last year hit a record 2.1 billion euros ($2.25 billion), above the company’s estimate of a 1.68 billion euro expert consensus.
The automaker, which earned a profit in 2021 after spending the previous two years in the red, said that without the sale of its erstwhile Russian company Avtovaz, net income increased from 2021 to 2022 by 1.1 billion to 1.6 billion euros.
Last year, Renault allegedly paid just one rouble to the Russian government for its controlling ownership in Avtovaz, with a six-year option to purchase it back.
As part of an agreement made public this month, Renault will restart its long-standing and occasionally controversial collaboration by reducing its ownership position in Nissan from 43% to 15%.
The arrest of Carlos Ghosn, the two carmakers’ creator and former chairman, in 2018 amid a financial scandal, severely damaged the unbalanced relationship between the two automakers.
Nissan will also purchase a share of up to 15% in Renault’s electric car company Ampere as part of the agreement, which was reached after months of tough negotiations.
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