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Renault weighs separating electric car business via IPO

PARIS (Reuters) -French carmaker Renault mentioned on Friday all choices had been on the desk for separating its electrical automobile (EV) enterprise, together with a potential public itemizing within the second half of 2023.

Thierry Piéton, Renault’s finance chief, mentioned any plans had been topic to approval from its alliance companion Nissan, however made clear the Japanese carmaker was “within the loop” as Ranault weighs up its choices.

Renault has been pushing forward with plans to separate its electrical automobile and combustion engine companies because it seeks to meet up with rivals similar to Tesla and Volkswagen within the race to cleaner driving.

Ford mentioned final month it might run its EV enterprise individually from its legacy combustion engine operations.

The information got here as Renault posted better-than-expected income for the primary quarter, as larger costs and rising electrical automobile gross sales largely offset the influence of the battle in Ukraine and an ongoing world scarcity of semiconductors.

Renault shares briefly spiked as a lot as 5% after Bloomberg reported that Renault could think about reducing its stake in Nissan as a part of its plans to separate its EV enterprise.

Renault declined to remark.

When requested concerning the report, a Nissan spokesperson mentioned “we don’t touch upon hypothesis.”

In early afternoon Paris buying and selling, Renault shares had been up 1.4%.

FILE PHOTO: The emblem of Renault is pictured at a dealership in Vertou, close to Nantes, France, January 17, 2022. REUTERS/Stephane Mahe

The group, which additionally makes Dacia and Lada model autos, mentioned its income fell by 2.7% from a yr earlier to 9.75 billion euros ($10.6 billion). Analysts had anticipated income of round 9.61 billion euros, in line with Refinitiv estimates.

Excluding Avtovaz and Renault Russia, income was down 1.1% at 8.9 billion euros.

Final month, Renault mentioned it might droop operations at its plant in Moscow whereas it assesses choices on its majority stake in Avtovaz, Russia’s No. 1 carmaker.

On Friday, the French carmaker mentioned talks on the way forward for Russian operations had been “ongoing and making progress.”

The drop in first-quarter income adopted a 17% decline of car gross sales to 552,000 autos, Renault’s lowest quarterly whole because the depths of the worldwide monetary disaster in 2009.

The corporate mentioned gross sales of fully-electric and hybrid autos rose 13% and accounted for 36% of the whole. Costs had been up 5.6% from the primary quarter of 2021 because the group pursues gross sales of extra worthwhile automobiles.

In a consumer observe, J.P. Morgan analysts described this as a “robust quarter.”

“Renault continues to ship on its pricing and mannequin rationalization coverage and right now’s outcome is available in as one other step in the appropriate course,” they wrote.

Renault confirmed its monetary outlook specified by March for a 2022 working margin of round 3% and mentioned it might give an in depth replace on its targets and technique later this yr.

The worldwide scarcity of semiconductors, utilized in the whole lot from brake sensors to leisure methods, will reduce Renault’s deliberate automotive manufacturing by 300,000 autos in 2022, largely within the first half of the yr, the corporate mentioned.

Renault’s order e-book on the finish of March was at a 15-year excessive of three.9 months of gross sales.

($1 = 0.9223 euros)

Reporting by Gilles Guillaume and Nick CareyWriting by Sudip Kar-GuptaEditing by Tomasz Janowski and Mark Potter

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