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February 22, 2019

Renault profits plunge in first annual earnings since Ghosn arrest

Renault profits plunge in first annual earnings since Ghosn arrest
'Ghosn is accused of under-reporting millions of dollars in salary as head of Nissan' - By: AFP/File Ludovic MARIN

Renault profits fell sharply last year, the French automaker said Thursday, releasing its first annual results since the shock arrest in Japan of former boss Carlos Ghosn.

Meanwhile, Renault's new chairman Jean-Dominique Senard, elected after Ghosn resigned, arrived in Japan Thursday for talks with partner Nissan in a bid to smooth relations which grew strained under Ghosn's leadership.

Renault's net profit for 2018 plunged 37 percent from a record 5.1 billion euros ($5.75 billion) the previous year, hit by shrinking profits at Nissan and changes in exchange rates in some emerging countries.

"This decline came mainly from Nissan's contribution, down 1.282 billion, which notably benefited in 2017 from a one-off gain of 1.021 billion," Renault said in a statement.

Nissan on Tuesday slashed its full-year forecast as its nine-month net profit dropped 45 percent.

The results came as Renault, Nissan and the third partner in their alliance, Mitsubishi Motors, seek to turn the page after Ghosn's arrest in Tokyo in November.

- Restore confidence -

Ghosn is accused of under-reporting millions of dollars in salary as head of Nissan, the biggest partner by sales in an alliance that Ghosn built into the world's top-selling auto group.

Last month he resigned as CEO of Renault, having already been stripped of his chairman titles at Nissan and Mitsubishi.

He has been in a detention centre in Tokyo for three months with little prospect of release before a trial that could take months to materialise.

Renault's new chairman Senard, who is to have a series of talks with top Nissan officials, told reporters before leaving for Japan he intended to "re-establish confidence, transparency and loyalty" between the partners.

He is due to join Nissan's board in April, but the question of overall chairmanship of the Nissan-Renault group remains a bone of contention, with the Japanese fearing conflicts of interest and anxious to avoid any hegemonic rule by another Ghosn-like figure.

Senard, quoted by Kyodo news agency on arriving in Japan, said it was "too early" to discuss the joint chairmanship.

- Record sales -

Renault last month announced record sales of 3.9 million vehicles in 2018.

Operating margins fell 6.3 percent to 3.61 billion euros, or 6.3 percent of revenues.

"In 2018, Groupe Renault maintained its strong performance, despite the business environment deterioration," said Thierry Bollore, Ghosn's successor as CEO.

"The commercial and financial results demonstrate the Group's resilience and its rapid adaptation to a more challenging environment. This performance is the result of a clear strategy, increasingly stringent execution and the efforts of all Group employees".

In 2019, the group said "both the global and European market are expected to be stable compared to 2018," and Renault aimed to increase revenues and achieve an operating margin of around 6.0 percent.

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