Peugeot plunges into record loss
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PARIS, Feb 13 AFP
February 14 2013, 05:07AM
French car maker Peugeot Citroen has reported a record loss of 5.0 billion euros ($A6.57 billion) but says it is on the road to recovery from crisis, and the government insists nationalisation is not on the agenda.
PSA Peugeot Citroen, the biggest French carmaker and Europe's second-biggest after Volkswagen, shocked France in the middle of last year when it announced huge job cuts and a plan to shut a plant near Paris.
But in announcing its annual results, the group said it had built the foundations for recovery after cleaning up its balance sheet and implementing a tough restructuring plan.
Peugeot blamed the results on a previously announced asset writedown of 4.7 billion euros last year and on the crisis in the European car market.
The loss compared with a profit of 588 million euros in 2011, while revenue for the year fell 5.2 per cent to 55.4 billion euros.
"The Group's 2012 results reflect the deteriorated environment in the automotive sector in Europe," Peugeot head Philippe Varin said in a statement.
But he added: "The foundations for our rebound have been laid."
Investors appeared to believe this as the company's share price soared over seven per cent to 6.40 euros in late afternoon trade.
The results were worse than forecast by analysts and overshadowed the previous record loss of 1.2 billion euros in 2009.
The operational loss for 2012 stood at 576 million euros, sharply down from a one billion profit in 2011, with net debt at 3.0 billion euros, the company said.
The dire state of finances at the privately owned company has prompted some talk of nationalisation in order to rescue one of France's most iconic companies and biggest employers from catastrophe.
But French Finance Minister Pierre Moscovici firmly dismissed the possibility saying it was "absolutely" not relevant and that it was up to Peugeot management to implement its recovery plan.