By Gilles Guillaume and Ingrid Melander
BOULOGNE-BILLANCOURT, France (Reuters) – French carmaker Renault announced a dividend for the first time in four years, flagging improving margins and earnings as well as a full order book as its ongoing revamp starts to bear fruit.
Though the company swung back to a loss with the hit from its withdrawal from Russia, the 2022 group operating margin doubled from the previous year to 5.6% as it focused on new launches, electric vehicles and fewer discounts.
“We are out of the emergency room and back in the game, ready to fly and to race,” Chief Executive Luca de Meo said on an analyst conference call after the carmaker reported full-year results.
De Meo added that the environment will remain challenging for the car industry in 2023, mainly surrounding supplies and logistics.
Renault, which is revamping its 24-year old alliance with Nissan, is now targeting a group operating margin of 6% or more this year, above analyst expectations of 5.5%.
The company proposed a dividend of 0.25 euros per share – the first since a more than 3 euros per share payout in 2019 – to be approved at the annual general meeting on May 11.
Renault’s automotive operational free cash flow, under scrutiny from analysts, reached a record 2.1 billion euros ($2.25 billion) last year, beating a 1.68 billion euro analyst consensus provided by the company.
The carmaker, which had returned to profit in 2021 after two years in the red, said net income without the disposal of its former Russian unit Avtovaz rose by 1.1 billion euros from 2021 to 1.6 billion euros.
Renault sold its majority stake in Avtovaz to the Russian state last year, reportedly for only one rouble but with a six-year option to buy it back.
GRAPHIC: Renault has rallied this year (https://fingfx.thomsonreuters.com/gfx/mkt/lbvggbaxqvq/renault.PNG)
Renault shares turned negative after touching a three-year high in early trade but remain about 34% up this year.
Under a deal announced this month, Renault will cut its stake in Nissan to 15% from 43% in a reboot of their long and sometimes contentious alliance.
The lopsided relationship between the two carmakers was deeply strained by the 2018 arrest of its architect and former chairman, Carlos Ghosn, amid financial scandal.
The agreement, which came after months of tense talks, will also see Nissan buy a stake of up to 15% in Renault’s electric vehicle business Ampere.
($1 = 0.9341 euros)
(Reporting by Gilles Guillaume and Ingrid Melander; Additional reporting by Tassilo Hummel; Editing by David Goodman)
