French automaker Renault on Thursday slashed its revenue guidance for 2019 further and reduced its profitability forecast, mentioning difficulties in markets such as Turkey and Argentina as automakers grapple with a broad-based decline in auto sales.
Renault has just rejigged its top management as it attempts to draw a line under a scandal surrounding former CEO Carlos Ghosn.
Renault stated sales were likely to reduce between 3% and 4% this year.
In July it had already abandoned a promise to boost earnings before currency effects in 2019, stating it expected sales to be close to the last year’s, just as competitors across the industry issued a number of profit warnings linked to dropping demand in major markets like China.
In a flavor of the turbulent reporting season to come for the sector in the third quarter, Renault also stated its operating margin was set to come in at 5%, compared to a previous 6% goal.
It added that it was re-evaluating its mid-term goals, and reported a 1.6% fall in sales for the July to September period to 11.3 billion euros ($12.6 billion), dropping 1.4% at constant exchange rates and without the effect of acquisitions or sales.
Interim chief executive Clotilde Delbos – whose remit as financial chief was expanded earlier week after Thierry Bollore was removed as CEO – stated the modified guidance was also due to Renault’s struggle to shrink research and development costs as much as it had prepared to at the start of the second half.
“Everything is associated to the market and some disappointment on the action plan launched at the end of July,” Delbos informed a conference call.
Renault stated on Thursday that its operating free cash flow might not end the year as a whole in positive territory, nonetheless it would be in the black in the second half of the year.
It came in at a negative 716 million euros in the first six months of this year.
The company, which pre-released its third-quarter trading update, stated a fuller publication was still planned for October 25.
